Czech billionaire Daniel Kretynsky has offered a €1.1bn investment in heavily indebted French supermarket group Casino, in a challenge to current controlling shareholder Jean-Charles Naury.
The surprise offer from Casino’s second-largest shareholder comes as Naouri is already in exclusive talks over a deal to combine its French retail business with Teract, a smaller food retailer backed by a trio of prominent French businessmen.
Casino, which Nauri controls through a 51 percent stake, said Monday it “accepts the proposal” from Kretinsky and said it could “result in a change of control of the Casino and a dilution that could be very significant to existing shareholders “. .
Casino said it is also considering seeking the appointment of a mediator to oversee negotiations with Kretinsky as well as the proposed deal with Teract, both of which would require the signature of its bank creditors and bondholders.
If finalized, the offer from Kretinski would provide Casino with an injection of new capital. However, it would also increase Kretinsky’s stake in Casino to about 40 percent, making him the largest shareholder, according to people briefed on the proposals. Nauri has previously rejected other potential deals, such as with larger rival Carrefour, which would have seen him lose control of the food retailer he has spent decades building.
It remains to be seen whether Kretinsky’s move will throw a wrench in Casino’s plans to tie up with Teract, but two people close to the situation said Nauri is unlikely to accept losing control of Casino. Kretinski made the unsolicited offer in response to developments with Teract, and it was not something Naouri was looking for, they said.
Both Casino and the four parent companies through which Naouri controls the food retailer face an overhanging debt repayment wall. Casino, which owns the Franprix and Monoprix chains, must repay €1.2 billion in debt in 2024 and €1.8 billion in 2025. Rallye, the holding company through which Naouri controls Casino, entered into a secured court restructuring in 2019
In a separate announcement on Monday, Casino said it was continuing exclusive talks with Teract, seeking to finalize a deal that would spin off Casino’s French retail network and combine it with Teract’s organic food and garden center business, while injecting up to € 500 million new investment in the operation.
Teract was formed in a Spac deal involving Invivo, a farming cooperative, and entrepreneur Moez-Alexandre Zouari, tech billionaire Xavier Niel and investment banker Matthieu Pigasse.
In a push for that potential tie-up, Groupement Les Mousquetaires, which runs Intermarche, France’s third-largest supermarket chain, said it was considering investing in the new group. A two-year extension of the purchasing alliance with Casino to 2028 is also under discussion.
Clément Genelot, an analyst at Bryan Garnier & Co, called Kretinsky’s proposal “very surprising, as Mr. Kretinsky has always been quite discreet.”
“In any case, Mr Nauri now looks increasingly poised to lose control of the casino faster than initially expected with renewed risks of bankruptcy on his holdings above,” Genellot added.
Under Kretinski’s proposals, EP Global Commerce — an entity linked to his investment vehicle VESA Equity Investment, which owns 10 percent of the retail group — would inject up to €750 million of additional capital into Casino. Fimalac, another casino investor controlled by French businessman Marc Ladreit de Lacharrière, will inject up to 150 million euros, while other existing casino shareholders will put in up to 200 million euros.
The proposal would also include buying back the casino’s unsecured debt, turning it into equity. The company’s creditors will also have to sign off on any change of control.
The casino’s shares, which have fallen more than 60 percent in the past year, were up 2.4 percent in morning trade in Paris.