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Carrefour to Return $6.88 Billion to Investors

Carrefour, the world's No. 2 retailer, said on Thursday it aimed to return around 4.5 billion euros ($6.88 billion) to investors in coming years as it reported slightly higher 2007 profits and faster growth in 2008.

One year after a board room bust-up and France's richest man, Bernard Arnault, buying a stake Carrefour said in a statement it was ready for a "breakthrough year" in which faster sales growth would translate into even faster growth in profits.

"We are expecting sales growth of 6 to 8 percent, excluding acquisitions, and an increase in activity contribution (operating profit) faster than sales," Carrefour said.

Carrefour said 2007 underlying net profit rose 0.7 percent to 1.87 billion euros and it aimed to return around 4.5 billion euros to shareholders over the next three years after asset sales.

Chief Executive Jose Luis Duran told reporters on a conference call that all options were open as to how money would be returned to shareholders and the group first had to realize its plans to dispose of property assets.

Operating profit, before a change in accounting rules, rose 3.3 percent to 3.36 billion euros on already reported sales up 6.8 percent at of 82.15 billion euros.

Wal-Mart , its bigger rival, had sales of $375 billion euros in its fiscal year to Jan. 31.

Carrefour affirmed its ambition to eventually list part of its new property unit but said it would first seek to raise 1 to 1.5 billion euros through a private placement of shares, probably in the last quarter of 2008.

It said it expected to generate 1.5 billion euros of operating free cash flow in 2008 and this would be used to make "tactical acquisitions."

Ownership Shakeup

Carrefour's main family shareholder said on Wednesday it would dissolve its own ownership pact and give up some seats on the company's board in order to regain "freedom to manage" its holding.

The Halley family controls around 13 percent of Carrefour, including 10 percent via two holding companies, Halley Participations and Comet, which will now act separately.

The announcement led to speculation Arnault may move to increase a 9.1 percent stake in Carrefour he acquired jointly last year with U.S. property group Colony Capital.

In a statement on Wednesday, their investment vehicle Blue Capital said it took note of the Halley family's announcement which it said would permit it to "fully play its role as the (company's) reference shareholder."

"Blue Capital reiterates...the strategic nature of its holding as well as its confidence in management's ability to unlock the group's potential to create value," it said.