UPDATE 1-Brazilian retailer Via Varejo's board approves offering; shares rise

(Adds share performance, analysts’ comments)

SAO PAULO, June 4 (Reuters) - Brazilian electronics and appliances retailer Via Varejo SA said on Thursday its board has approved a primary share offering to raise up to 4 billion reais ($790 million), driving its shares higher.

The owner of the PontoFrio and Casas Bahia chains said it plans to issue 220,000,000 new shares in the offering, which may be increased by an overallotment of up to 77,000,000 shares, according to a securities filing released early on Thursday.

Based on a closing price of 13.48 reais on Wednesday, Via Varejo said it may raise between 2.965 billion and 4.004 billion reais.

The investment banking units of Banco Bradesco SA, Banco BTG Pactual SA, Banco do Brasil SA, Bank of America Merrill Lynch, Banco Santander Brasil SA and brokerage XP will manage the offering.

Via Varejo said the deal will be priced on June 15 and the new shares will start trading on June 17.

Shares of Via Varejo fell 5.4% at the opening of trading on Thursday but recovered to rise as 4%.

“We believe that the offer of shares should not only make room for more accelerated growth, but also provide a significant relief to the company’s balance sheet, which was among the main concerns of investors,” Credit Suisse analysts Victor Saragiotto and Pedro Pinto said.

“A more comfortable balance sheet gives the company more freedom to invest in its market, make small acquisitions of technology providers and improve its payment solutions,” they added.

Saragiotto and Pinto estimate the share offering would result in a dilution of 14.5% to 18.6% if the overallotment is issued.

Early in May, Reuters reported that Via Varejo was considering a share offering with a dilution rate not higher than 25% of its market capitalization and would decide on the transaction after releasing its first-quarter earnings.

Days later, the retailer posted a quarterly net income of 13 million reais, reversing a net loss of 50 million reais a year earlier.

$1 = 5.0626 reais Reporting by Gabriela Mello; Additional reporting by Paula Arend Laier; Editing by Jason Neely and Paul Simao