Carrefour is studying Casino takeover

The distribution giant Carrefour has been considering a takeover offer from its rival since this summer, while its shareholder and boss Jean-Charles Naouri has placed the companies that control Casino in a legal indemnity procedure. Carrefour is hesitant to launch an offensive that Casino would consider hostile. Only Jean-Charles Naouri’s banks could induce him to sell his empire.

Carrefour is still looking at Casino. The group led by Alexandre Bompard did not give up. According to various sources, Carrefour has been studying an offer for its major competitor Casino for several weeks. At the beginning of the summer, Carrefour was considering an acquisition of the entire Casino group with the sale of assets and stores to satisfy the competition authority. It is mainly the overlap of supermarket brands (Franprix, Carrefour Market, etc.) that is a problem. But Alexandre Bompard has been studying this issue for a year.

A public exchange offer (exchange of shares) of between 4 and 4.2 billion euros has been reported, or 25% more than the value at the end of June. An important bonus to try to entice the casino banks. Because there is no doubt that CEO Jean-Charles Naouri would reject an offer from Carrefour. However, he is in financial difficulties and at the end of May was forced to place his companies (Rallye, Foncière Euris, Finatis and Euris) Casino shareholders in legal indemnification proceedings. The first, Rallye, will crumble below EUR 2.9 billion in net financial debt at the end of June.

Kretinsky to counter Carrefour?

But last week the situation changed. Czech billionaire Daniel Kretinsky entered Casino by taking 4.63% of his capital, bringing the share price to 44 euros. According to our information, there was a meeting last weekend between the Carrefour teams, bankers and lawyers to assess the situation. Will go, won’t go? “Carrefour is still working on this file, but is hesitant to launch an offensive, a good friend of the group nuances. Casino brought in Kretinsky to counter our project”. According to our information, the group could improve its proposed offer, around EUR 48, by adding cash. When contacted, the management of Carrefour assures that “there is no offer on the table”, without denying the holding of “regular meetings of its teams on all subjects”… For its part, van Casino did not want to answer us.

A year ago, Casino had indicated that it had been approached by its competitor with a view to a merger, before Carrefour denied this information in a separate press release.

A Carrefour offensive would inevitably be viewed as hostile by Casino CEO Jean-Charles Naouri. It would then be necessary for Carrefour to ensure the support, if not the goodwill, of the casino banks. Crédit Agricole, BPCE (Banque Populaire Caisse d’Epargne) and BNP Paribas are the only ones able to force the hand of Jean-Charles Naouri. This is the great unknown. “Carrefour is not sure that Casino Naouri’s banks will push to sell,” acknowledges a close friend of the group.

Raise the bet

The first, Crédit Agricole, seems pragmatic for the time being. “We would be willing to study an offer if it made it possible to repay the debts of Rallye (parent company of Casino, editor’s note), explains a close friend of the green bank. In other words, Carrefour would have to offer a €6 billion takeover to allow Rallye, a 51% shareholder, to pay off its €2.9 billion debt. In other words, a price equal to 55 euros per share… A high price for Carrefour. In addition, several sources report that the bosses of BPCE and BNP Paribas seem more likely to support the CEO of Casino. An astonishing position for BNP Paribas when its boss, Jean-Laurent Bonnafé, is a director of… Carrefour!

Be that as it may, the game is far from over for the group led by Alexandre Bompard. The young CEO paradoxically fears that his rival will be dismantled. “Bompard knows very well that Casino will not sell him any assets, deciphers a good expert on the file. His only card to play is to try and buy everything back”. Transfers of certain brands, such as Leader Price, or stores would only benefit competitors Leclerc, Auchan or Intermarché. Even to bring in a new actor: German Metro, whose first shareholder is… Daniel Kretinsky, Casino’s new shareholder.

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