PTT PCL (PTT.TH) Wednesday withdrew its bid for the Thai assets of Carrefour SA (CA.FR), thus allowing Berli Jucker PCL (BJC.TH) to be the front runner among local companies to buy the French hypermarket's interest.

Thailand's largest energy company by revenue has faced opposition to the bid from "important stakeholders," prompting it to ask its subsidiary PTT Retail Management not to participate, PTT Executive Vice President For Corporate Communications & Social Responsibility Auttapol Rerkpiboon said in a statement.

Energy Minister Wannarat Charnnukul on Tuesday questioned the plan by PTT, which is 51.36%-owned by the government, and claimed the decision was apparently made without the knowledge of board members.

Prime Minister Abhisit Vejjajiva also said Tuesday that according to the Constitution, state enterprises cannot operate in businesses that would compete with private companies without justification, adding that PTT would need to provide an explanation for its participation in the bidding.

PTT had joined in the bidding through PTT Retail Management, an operator of Jiffy convenience stores at Jet fuel stations. Company President Prasert Bunsumpun said earlier this month that adding Carrefour to its portfolio would provide synergies with its non-oil businesses.

On Wednesday, Prasert said the company hadn't been pressured into abandoning its bid, adding that it will push ahead with the expansion of its existing retail business. He said it wasn't a lost opportunity as there was no guarantee PTT would have won the bid.

PTT's withdrawal won't have any impact on the company as income that Carrefour would have added is insignificant compared with total revenue, said Ayudhya Securities analyst Charnvut Taecha-amorntanakij.

"I think it doesn't make sense (to join the bid) as PTT doesn't have much expertise in the retail business. Entering into the retail business would create risks," he said.

Kim Eng Securities strategist Mayuree Chowvikran said the bidding should now favor consumer products manufacturer Berli Jucker, which is 70.6%-owned by TCC Holding. The Sirivadhanabhakdi family, which owns TCC, is one of Thailand's wealthiest and has the financial capacity to help Berli Jucker outbid the other Thai companies, Big C Supercenter PCL (BIGC.TH) and retail group Central Group, involved in the bidding race, Mayuree said.

A spokeswoman for Big C said any involvement of the company in the bidding lies with its French parent company Casino Guichard-Perrachon SA (CO.FR). Berli Jucker and Central couldn't be immediately reached for comment.

Carrefour, the world's No. 2 retailer after U.S.-based Wal-Mart Stores Inc. (WMT), has been in Thailand since 1996, operating 43 stores nationwide.

The Wall Street Journal earlier this month, citing people familiar with the matter, reported that Carrefour had cut British rival Tesco PLC (TSCDY, TSCO.LN) and Japan's Aeon Co. (AONNY, 8267.TO) out of the bidding for its stores in Southeast Asia. At the time, Casino along with Big C, Berli Jucker, Central Group and PTT had made it through to the next round.

The report said Carrefour hopes to raise around $1 billion through the sale of assets in Thailand, Malaysia and Singapore.

PTT shares were up 1.7% at THB292 at the midday break, above the broader market's 1.1% gain. One analyst said the stock also rose as investors have viewed a further foray by PTT into retail would entail considerable risks given that the segment isn't its mainstay business.

Berli Jucker rose 1.7% at THB18.30 in part because of PTT's withdrawal from the bid while Big C added 0.4% at THB59.50.

-By Oranan Paweewun and Piyarat Setthasiriphaiboon, Dow Jones Newswires; 66 2690 4200; oranan.paweewun@dowjones.com
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