(Reuters) – Czech billionaire Daniel Kretinsky has pressed Casino management to sell its biggest stores as part of the “lock-up” agreement signed in October, a source close to the matter said on Wednesday.
Daniel Kretinsky, one of the group’s main creditors, expressed his reservations to the group’s chairman and CEO Jean-Charles Naouri about the possibility of retaining the cash-intensive stores, particularly after Casino issued two warnings on results this month due to the deterioration of the situation of its hypermarkets.
“The discussions were frank,” said the source, adding that in-depth changes to Casino’s rescue plan were discussed.
Casino is working to reach a rescue deal to avoid bankruptcy early next year, when Kretinsky will take control of the group.
If finalized, the sale of hypermarkets and supermarkets would significantly reduce the size of Casino. Its turnover would increase from 33.6 billion euros in 2022 to around 8 billion, and its market share in France would be halved to around 3%, estimates Nicolas Champ, analyst at Barclays.
Casino confirmed on Monday that it had received preliminary expressions of interest with a view to acquiring stores in the hypermarket and supermarket perimeter, without however specifying the buyers or the number of stores that the company plans to sell.
Bids are expected by an indicative deadline of Wednesday.
Most of Casino’s French competitors, including Intermarché, Système U, Auchan and Carrefour, as well as the German discount group Lidl, could be interested in these sales, the source said.
At this stage, negotiations with Lidl and Intermarché are the most advanced.
The Les Mousquetaires group, parent company of Intermarché, has already agreed to buy around 61 stores from Casino in May. Intermarché also has a purchase option on a second group of 72 stores, exercisable within three years at the latest.
Carrefour and Lidl declined to comment, while Intermarché, Système U and Auchan could not immediately be contacted for comment.
Reacting to the announcement of the potential sale, Daniel Kretinsky’s investment vehicle, EP Equity Investment, said: “These disposals would in no way impact our determination to become the majority shareholder of Casino and to invest in the development of the remaining scope, particularly in Monoprix and the Franprix brands.”
(Reporting Shivani Tanna, Dominique Vidalon and Mathieu Rosemain; French version Camille Raynaud and Gaëlle Sheehan, edited by Jean-Stéphane Brosse)
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