(Bloomberg) -- French grocer Carrefour SA is in the early stages of studying ways to boost its valuation, more than three years after talks to sell itself to an industry rival fell apart, people with knowledge of the matter said. 

Carrefour is discussing various scenarios internally and speaking to advisers about potential options for the business, the people said, asking not to be identified because the information is private. Possibilities under review include asset divestments, growing through partnerships and acquisitions, or an operational reorganization, according to the people. 

Paris-listed Carrefour could also consider a full sale or sell a stake in the company should an interested suitor emerge, the people said. Another possibility would be to remain independent while pursuing measures to boost its competitiveness through strategy changes and new investments, the people said. Shares of Carrefour have fallen about 30% from their recent peak in 2022, giving the company a market value of about €10.1 billion ($11 billion).

A sale may attract interest from private equity firms and industry players if Carrefour moves forward, according to the people. Deliberations are at an early stage, and there are currently no formal talks with any suitors, the people said. Carrefour may ultimately decide not to pursue any transaction. A representative for Carrefour declined to comment.

The company’s American depositary receipts rose as much as 9.5% Monday and were up 5.4% to $3.32 at 2:54 p.m. in New York trading.

Brazil, Spain

Carrefour’s biggest markets include France, Brazil and Spain. Its listed Brazilian unit has a market value of about $2.9 billion in Sao Paulo.

Circle K owner Alimentation Couche-Tard Inc. in early 2021 abandoned talks on a proposed $20 billion merger with Carrefour following stiff opposition from the French government. The Canadian firm is currently trying to buy Japanese convenience store and retail giant Seven & i Holdings Co.

Rival French grocer Auchan has also studied a potential deal for Carrefour multiple times in the last few years, though a deal never materialized.

A take-private of Carrefour by a buyout firm would face challenges including the big ticket size, with an enterprise value of around €25 billion including debt, a difficult retail market and potential political backlash. Carrefour assets such as those in Brazil or certain European markets could be easier to monetize. That said, French drugmaker Sanofi agreed last month to enter exclusive talks to sell control of its consumer health unit to US buyout firm Clayton Dubilier & Rice after France secured social commitments and agreed to take a small stake.

Any transaction would need support from Carrefour’s billionaire shareholders including the Moulin family, who own French department store group Galeries Lafayette. A holding company set up by late Brazilian businessman Abilio Diniz also owns a significant stake in Carrefour.

Stake Sale

The Moulin family, which is behind Carrefour’s biggest shareholder and investment vehicle Galfa, has been looking to sell down its stake after the sluggish share performance. The unit sold a stake back to the French supermarket in March.

Carrefour Chief Executive Officer Alexandre Bompard, who took the reins in 2017, is seen as a dealmaker and previously oversaw the acquisition of Darty when he was CEO of retailer Fnac. Carrefour has faced stiff competition from discount retailers in France such as Aldi and Lidl amid the cost of living crisis. 

Lately, there have been signs that the inflation pressure is easing with consumers in France, its biggest market, spending more on organic food, Bompard said last month. Carrefour’s third quarter revenue update showed that the recovery has been slower than expected.

--With assistance from Angelina Rascouet, Francois de Beaupuy, Pamela Barbaglia and Michael Hytha.

(Updates with share gain in fifth paragraph)

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