2023-07-17 20:43:00
Collapsed under the weight of a colossal debt of more than 6 billion euros, Casino collapsed like a house of cards. After four months of twists and turns, the distribution group is about to be taken over by Czech billionaire Daniel Kretinsky, in partnership with Marc Ladreit de Lacharrière and the investment fund Attestor. Their takeover offer is indeed the only one on the table after the withdrawal this Sunday of that of the trio Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari. It was presented on Monday to Casino management, creditors, CIRI, Bercy’s weapon to help companies in difficulty, and administrators. On Monday evening, “the board of directors, on the unanimous recommendation of its ad hoc committee comprising almost all the independent directors, decided to continue negotiations with the buyers, as well as with the group’s creditors, in order to reach an agreement in principle on the restructuring of Casino’s financial debt by the end of July 2023,” Casino said. As a reminder, Casino had set July 27 as the deadline to find an agreement in principle with its main creditors. This, within the framework of an amicable conciliation procedure opened at the end of May and which can last up to five months. What save Casino hope the 200,000 employees worldwide, including 50,000 in France, while the distributor faces serious financial difficulties, crushed by a debt announced at 6.4 billion euros at the end of 2022. Back in five dates on the forced march of Daniel Kretinsky which marks the end of the era of Jean-Claude Naouri and opens a new chapter in the history of the group.
In Saint-Etienne, stronghold of Casino, the fear of the disappearance of the local anchoring of the group
March 9: Exclusive alliance between Casino and Teract
One month after having confirmed that they are conducting “exploratory” discussions for a possible merger of distribution activities in France, Casino and the Teract holding company announce the signing of a “ exclusivity agreement ” aiming to ” enter into a binding agreement to create the French leader in responsible and sustainable distribution “. On the menu, the creation of two separate entities: the first would be controlled by Casino and would bring together distribution activities in France ” with the more than 9,100 stores of the Casino group and “ expertise in the operation of garden centres, pet shops and food by Teract. The holding company owns the Louise bakeries, the Frais d’Ici and Bio&Co brands and the Gamm Vert and Jardiland garden centres. The second would be supervised by the union of 188 agricultural cooperatives InVivo, the main shareholder of Teract and a behemoth of agribusiness in Europe. Named “Teract Ferme France”, it would be in charge of the supply of agricultural products. The new group intends to raise equity “ additional ” of ” around 500 million euros ». « Discussions with a number of investors are already underway, assure the two partners.
March 24- Daniel Kretinsky comes out of the woodwork
On March 24, Daniel Kretinsky, the group’s second largest shareholder with 10% of the capital, announced his intention to take a stake in the latter. It proposes to it, in fact, to inject 750 million euros via a reserved capital increase which, if completed, would lead to “a change of Casino control”.
But he is not the only one interested in the Saint-Etienne group. On the same day, the group of independent stores Intermarché, the third player in distribution in France, already a purchasing partner of Casino, announced that it had joined the « discussions exclusives » on a possible merger between Casino and the Teract group. In addition to the extension of the purchasing alliance between Intermarché and Casino, the discussions relate in particular to the takeover by Intermarché “over several years and at market price” of a number of stores belonging to Casino “representing at least 1.1 billion euros in turnover including tax”. They also concern Intermarché’s acquisition of a minority stake in the capital of the entity resulting from discussions between Casino and Teract.
As a reminder, the group of independent stores Intermarché, newly created and listed on the stock exchange, is headed by Moez-Alexandre Zouari. In addition, its majority shareholder is the agrifood giant InVivo. Finally, its board of directors include the founder of Free Xavier Niel and the banker Matthieu Pigasse.
April 24- Opening of an amicable procedure to renegotiate the debt
Rallye, Casino’s parent company, obtains from the Paris Commercial Court the opening of an amicable procedure, known as an “ad hoc mandate”. The other companies through which Casino CEO Jean-Charles Naouri controls the group of Saint-Etienne origin, namely Foncière Euris, Finatis and Euris, are also affected by this procedure decided “for an initial period of three months (renewable) “. They had been the subject of a safeguard plan in 2019. At that time, Rallye feared that a Casino conciliation procedure, mentioned a few days earlier, could cause Casino to fall into the hands of “certain creditors of Rallye, “including Fimalac”, already the third largest shareholder of Casino and owned by French billionaire Marc Ladreit de Lacharrière. This in the event that Casino securities serve as collateral for part of the debt of the parent company. In total, 11.7% of Casino’s capital would serve as a sort of guarantee for Rallye’s claims.
What cause the loss of control of Jean-Charles Naouri, first shareholder since 1992 and CEO since 2005. Like other French bosses at the time, Jean-Claude Naouri used a multitude of holding companies to take control of large groups without a large investment. He thus took control of Rallye, a struggling Breton distributor, and ” brought “ Casino, of which he became the first shareholder in 1992. He then made this entity grow through financial and often legal battles, acquiring fine names in distribution: Franprix, Leader Price, Monoprix, or even the e-merchant CDiscount. Its ambitions were not limited to France and Casino even became an important player in Latin America. A bulimia that has raised the concerns of some investors.
On December 16, 2015, the American short seller Muddy Waters Capital published a report denouncing the high level of indebtedness of the group. An accusation to which the group responded by denouncing “speculative attacks”, “for the purpose of causing an artificial fall” the stock market price. Nevertheless, financial difficulties quickly appear in broad daylight. Thus, in mid-2019, Rallye and the cascade of holding companies through which Jean-Charles Naouri controls Casino were placed in safeguard by the Paris Commercial Court. Not to mention that the brand, because of its cost structure, cannot lower its prices as much as some of its competitors. A problem when inflation pushes consumers to seek the lowest fares. Result: Casino continues to lose market share in France.
In the turmoil, Casino lowers its prices to bring back customers
May 25 – Conciliation procedure with creditors
May 25. Three days after Casino made it tomorrow, the Paris Commercial Court validated the distributor’s entry into conciliation proceedings. This amicable procedure, decided for a period of four months “possibly extendable by one month”, should allow the company, indebted to the tune of 6.4 billion euros at the end of 2022, including 4.5 on its activity in France , to reach an agreement with its creditors with a view to a potential restructuring of its debt. Debt reduction is indeed the “absolute priority” of the group, hammered the distributor a few days earlier during its general meeting, under the heavy fire of questions from shareholders evoking a “ wall of debt and claiming dividends. That day, Jean-Charles Naouri had indicated that he remained “ for sale approximately 300 million euros of assets in France before the end of the year and recalled that the group had already sold around 10 billion euros of assets as part of its deleveraging strategy. Financial Director David Lubek, for his part, spoke of a cost reduction plan of 250 million euros over the year, and a reduction in inventories of 190 million euros in the first half.
In parallel with the opening of the entry into conciliation, Casino announced on May 25 an agreement with Intermarché for the sale of more than a hundred points of sale “from the Casino France scope”, including hypermarkets, supermarkets and local brands, weighing just over a billion euros in turnover. The first transfers will take place by the end of this year “. Intermarché, which plans to convert some of these stores into discounters for its Netto brand, has also committed to acquiring “if Casino requests it within three years, “an additional volume of stores representing 500 million euros in turnover”.
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June 14 – Teract throws in the towel but the Niel-Pigasse-Zouari trio remains at the front
More than a month after offering Daniel Kretinsky to join forces, the agro-industrial group InVivo and its subsidiary Teract have put an end to their proposed merger with Casino, limiting themselves to considering a partnership. Founders of Teract, the three businessmen, Niel, Pigasse and Zouari prefer to bring out in their name “a lasting industrial and financial solution” for Casino. The trio transmits “a preliminary expression of interest” for a “reinforcement of equity” up to 1.1 billion euros. Of this total, “200 to 300 million would be invested directly by them”, specifies Casino in a press release. The rest of the sum would be “subscribed by partners who would associate themselves with their project”including Casino’s current creditors who “would like to reinvest in capital”further specifies the distributor.
The offers of the three businessmen and that of Daniel Kretinsky agree on the fact that the resumption of activity should go through a drop in prices on the shelves, a lot of work on the commercial offer and the development of partnerships. And, whether with one or the other of the two expressions of interest issued, Casino Group shareholders will be “massively diluted”says the group “and Rallye will lose control of Casino”thus ending the stranglehold of the historic boss of the distributor Jean-Charles Naouri.
July 16 – Kretinsky alone in the running
But it will ultimately be that of the Czech billionaire who holds stakes in the media (Liberation, Marianne, etc.), distribution (Fnac Darty), publishing (Editis, agreement concluded in June) and industry (mainly in the energy), if accepted. No other was submitted before July 3, the deadline, and Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari finally announced the withdrawal of their offer on Sunday July 16. The latter justified their choice by denouncing a recovery system ” biased “. This is, in fact, what 3F pointed out, the holding company through which the trio intended to take over Casino, considering that the distributor “has obviously already chosen his buyer”. In question, an alleged lack of cooperation and transparency on its financial situation, in particular on “liquidity needs” and the results expected by the end of the year, but also the betrayal attributed to one of the creditors with which the trio had built its round table. 3F accuses investment fund Attestor of contributing to competing bid “while continuing to participate” at its own meetings.
Atos: billionaire Daniel Kretinsky interested in the outsourcing branch
On the side of the employee representatives, the news was well received: “We are reassured that the Niel-Pigasse-Zouari trio is withdrawing, because we did not want a vulture investment fund. Kretinsky’s project is attractive on paper, but we remain vigilant about its feasibility., judged Thomas Meyer, Unsa union representative of the Casino group. The plan provides for the injection of 1.2 billion euros in fresh money, including more than 900 million euros from the duo. In addition, he does not envisage the sale of hypermarkets or the sale of the online retailer CDiscount, according to his entourage. How to put Casino back on track?
(With AFP)
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