Majority of Spanish supermarket operator Distribuidora Internacional de Alimentación SA's shareholders agreed to support a €500 million recapitalization plan put forward by private equity firm L1 Retail, according to a March 20 announcement.

L1 Retail, which in February launched a voluntary tender offer for all of DIA's shares, previously advised shareholders to vote against DIA's own proposed €600 million capital increase. DIA's recapitalization plan would reduce the nominal value of its shares to 1 cent each, while L1's would be less dilutive to the stock.

LetterOne Holdings SA-owned L1 Retail owns 29% of DIA. It offered to buy DIA's shares for 67 euro cents per share, representing a 56.1% premium to the Feb. 4 closing price. The firm earlier said that Dia's proposed recapitalization plan does not address the challenges that the retailer is facing.

L1 Retail's capital increase plan for DIA is conditional upon the liquidation of the IPO announced by L1 Retail and the appointment of a majority of members of the board proposed by the firm.

DIA said its board will continue working with L1 Retail, financial entities and their advisers to comply with the requirements of the deal.