Nelson Tanure's Trustee reduces stake in Brazil's GPA to below 5%

SAO PAULO, May 7 (Reuters) - Trustee Distribuidora de Titulos e Valores Mobiliarios, an asset manager controlled by businessman Nelson Tanure, reduced its stake in Grupo Pao de Açucar PCAR3.SA to below 5%, the Brazilian retailer said in a statement on Wednesday.

The decision comes amid a battle for control over GPA's board, the fallout from which has sent the company's shares plummeting. They closed down more than 20% on Tuesday, marking the fourth consecutive day of losses.

The shares were down around 3.2% at 11:12 a.m. (1412 GMT) in volatile trading on Wednesday.

Tanure, who has been increasing his stake in GPA since last year, had held about 7% of GPA's shares.

Speaking to Reuters, he said he had had an audacious plan for GPA's future but had decided not to proceed with a project "in which we no longer believe."

In March, Tanure called for the dismissal of GPA's board and the election of new members, including three representatives of his own choosing.

However, other groups of shareholders - including investor Rafael Ferri and the Coelho Diniz family - who were not represented on the board, decided to appoint members as well, diluting support for Tanure's appointees.

In the end, he obtained a single board seat on Monday.

Ferri, whose group had elected two board members, reduced his stake in GPA, which had reached 5.86% by April 16, to 2.73% including derivatives on Monday, sending the shares into free fall.