(Bloomberg) -- Casino Guichard-Perrachon SA is set to auction its stake in Via Varejo, a Brazilian electronics retailer the debt-saddled French grocer has been trying to sell since 2016.

GPA, Casino’s listed subsidiary in Brazil, approved a sale of the 36% stake in Via Varejo for a minimum price of 4.75 reais per share in an auction, the company said in a statement Wednesday. That compares with Tuesday’s closing price of 5 reais and would value the stake at 2.23 billion reais ($580 million).

The auction will take place June 14 from 10:30 a.m. to 11:30 a.m. Sao Paulo time, local exchange B3 said in another statement. Via Varejo shares fell as much as 4.4% to 4.78 reais in Sao Paulo trading on the back of the sale’s announcement, while GPA’s shares were up as much as 3.5% to 89.91 reais.

“Via Varejo had rallied a lot on hopes for a deal and the offered price came in below the trading price,” said Luiz Roberto Monteiro, a trader at brokerage firm Renascenca, in an interview.

The sale is unlikely to make a dent in Casino’s 3.4 billion euros ($3.9 billion) in net debt, as the unit had already been written off as a discontinued activity since the sale process began. The retailer’s shares traded 1.2% lower Wednesday afternoon in Paris.

“It’s nevertheless good news because Via Varejo had been for sale for more than two years,” said Anne Barbara Nicco, credit analyst at Oddo BHF.

The potential buyer is Michael Klein, whose billionaire family already controls 25% of the company, and who has agreed to buy the shares in a letter to GPA’s board. Klein’s father founded one of the store chains operated by Via Varejo, and the deal would see the family take back control after selling its controlling stake to GPA in 2009.

Casino’s owners, including Chairman Jean-Charles Naouri’s Rallye SA holding company, entered a six-month creditor protection proceeding last month. The French proceeding allows Naouri to remain at the helm of Casino, of which he has pledged nearly all of his controlling stake as collateral for various debts.

Via Varejo has struggled with Brazil’s slow economic recovery and failed to keep up with competitors such as Magazine Luiza SA, which were more agile in transitioning into an omnichannel retail model. Its sales were below analysts’ estimates for the last six quarters, according to data compiled by Bloomberg.

(Adds details on the auction and shares movement in third paragraph, analyst’s comment in fourth paragraph.)

--With assistance from Luca Casiraghi and Albertina Torsoli.

To contact the translation editor responsible for this story: Eric Pfanner at epfanner1@bloomberg.net;John J. Edwards III at jedwardsiii1@bloomberg.net;Catherine Larkin at clarkin4@bloomberg.net

Reporters on the original story: Fabiola Moura in Sao Paulo at fdemoura@bloomberg.net;Robert Williams in Paris at rwilliams323@bloomberg.net;Vinícius Andrade in São Paulo at vandrade3@bloomberg.net

Editor responsible for the original story: Eric Pfanner at epfanner1@bloomberg.net

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