Czech billionaire Daniel Kretinsky looks poised to win the battle for control of heavily-indebted French supermarket retailer Casino after rival bidders dropped out of the running.
His bid had faced a challenge from 3F Holding, a group led by telecoms entrepreneur Xavier Niel, investment banker Matthieu Pigasse and businessman Moez-Alexandre Zouari. However, 3F announced yesterday it was dropping its offer, citing a “biased process” and a lack of information, as well as the fact that one of its backers – the Attestor Capital fund – had switched sides to support Kretinsky’s bid.
The move means that Kretinsky, who submitted a revised offer over the weekend, is the only bidder.
Casino is saddled with net debt of €6.4bn, with concerns growing that it could be forced to file for bankruptcy.
Speaking to the Financial Times over the weekend, Kretinsky stated that his revised offer was part of the company’s voluntary debt restructuring negotiation with creditors. In it, he and Marc Ladreit de Lacharrière’s Fimalac would lead a €1.2bn equity injection to take a 53% stake in the company. On top of that, €4.9bn of Casino’s debt would be converted into equity.
“With Fimalac and the support of key secured investors, we have presented a financial and industrial plan that can restore Casino to positive and, we hope, dynamic growth,” Kretinsky said.
Casino is France’s sixth-biggest food retailer, with 53,000 employees in the country. It has been controlled for decades by Jean-Charles Naouri, but he has saddled it with debt that rating agencies doubt it can repay.
The company, which has been burning through cash while losing market share to rivals, has been in a voluntary debt restructuring negotiation with creditors aimed at saving the company from bankruptcy. The process, which started in May, is being overseen by a court-appointed agent and closely watched by the French government, which is concerned about job cuts. The deadline for an overall debt restructuring deal has been set for 27 July.
Casino shares have fallen more than 75% in the past year. They were suspended shortly before the market opened today.
Last week, the retailer revealed that its sales in France in its second quarter had fallen by 6.6%, after a 4.6% decline in the first three months of the year. Core earnings were expected to record a loss of between €165m and €175m for the first half due to lower sales and prices at its hypermarkets and supermarkets.
Kretinsky, a former investment bank lawyer who built one of Europe’s largest energy groups, has been scooping up assets in retail, media and other areas. He has bought stakes in French national newspaper Le Monde, retailer Fnac-Darty, and grocery retailers Sainsbury’s and Metro.
NAM Implications:
- Whew! Now for a return to normal…
- As soon as possible, in everyone’s interest.
- Fingers crossed…
