Small shareholders fall at La Redoute

THE DANGERS of being a minority shareholder in a French company were demonstrated again yesterday when Pinault-Printemps, a large retailing and distribution business, announced an all-share offer for the outstanding minority interest in La Redoute, its mail-order catalogue arm.

The heavily indebted Pinault- Printemps, whose interests span electrical equipment, timber and department stores, expects to offer one of its shares for each share in La Redoute - which means it will pay less than the current market price.

While La Redoute makes substantial profits, Pinault-Printemps' holding company would be making heavy losses if it were not for profits on business disposals.

Vincent Barucq, an analyst with James Capel in Paris, said: 'Shareholders of La Redoute are big losers.'

Another analyst said: 'Investors in La Redoute shares are losing a pure, fast-growing investment in return for a stake in a multinational with diverse distribution businesses.'

Pinault-Printemps already owns 55 per cent of La Redoute, which three years ago paid pounds 49m for Empire Stores, the British mail-order firm.

The final terms of the deal will be fixed when Pinault-Printemps and La Redoute approve their 1993 results. Ahead of the merger, Pinault- Printemps shareholders will receive one free share for every 10 they hold.

Dealings in the shares of both companies were suspended until Monday. Pinault-Printemps shares are quoted at Fr995 ( pounds 118.17) and La Redoute at Fr960.

Pinault-Printemps said the deal would create a more efficient group and improve its 1994 results.

The combined business will have a turnover of more than Fr63bn.