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Chilean Retailer D&S Rises on Acquisition Speculation (Update2)

By Nathan Gill
     Oct. 15 (Bloomberg) -- Distribucion y Servicio D&S rose in
Santiago trading, helping limit a decline in Chile's main stock
index, on speculation it will be acquired by another retailer.
     D&S, which operates Chile's biggest supermarket chain,
climbed 3.7 percent to 195 pesos. A 19 percent gain so far this
week is the steepest weekly rise since May 2007. The Ipsa index
fell 0.4 percent.
     ``It's nothing more than the same rumor that's been going
around--that D&S could be sold, or another company is interested
in buying them,'' said Jose Javier Castaneda, a trader at
Santiago-based brokerage IM Trust, said by phone today. ``The
same thing has happened several times this year. Each time the
stock rallies and a few days later people start to sell and it
goes back down.''
     Chilean antitrust authorities rejected a planned merger
between D&S and department store operator SACI Falabella SA in
January. In July, El Mercurio reported that D&S held ``informal''
discussions with Wal-Mart Stores Inc. during the Falabella merger
talks. Some Chilean retailers may be attractive acquisition
targets, Raul Barros, an analyst at FIT Research Corredores de
Bolsa SA said by phone from Santiago today.
     D&S's share price last week fell to 18-times trailing
earnings, from more than 42-times earnings in June of last year,
according to Bloomberg data.
     D&S doesn't comment on rumors, an external public relations
representative said by telephone. Company spokesman Claudio
Hohmann wasn't available for comment, an assistant said.

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