Casino could sacrifice its last supers and hypermarkets to save the takeover by Kretinsky

Published on Nov 26, 2023 at 9:30 p.m.

The deterioration of the financial situation of Casino brands calls for decisions. They could be taken soon. To stop the bleeding, the group still led by Jean-Charles Naouri is preparing to sell more supermarkets to Intermarché, or even sell the balance of its supermarket and hypermarkets to the highest bidder. It thus received expressions of interest for its balance from 291 supermarkets (including 60 franchises) and 52 hypermarkets.

Intermarché has already taken over 61 supermarkets for 209 million euros and has a three-year option paid 140 million euros (through a 49% stake in their capital) on a second series of 72 other points of sale . It also has a promise to purchase a third batch of 62 supermarkets. According to our information, other brands come into play for the rest. Candidates for takeover must have submitted their offers on Wednesday.

“Lidl, U, Auchan, Carrefour: they are all buyers,” estimates Clément Genelot, analyst specializing in distribution at Bryan, Garnier & Co. A source cites the name of Carrefour which, no more than Casino, did not respond to the questions from “Echos”. Carrefour’s interest could be reduced by the fact that the group led by Alexandre Bompard has just taken over Cora. A potential buyer claims that it was Casino who solicited offers to raise the stakes…

Under pressure from Kretinsky

Examination of these proposals is the responsibility of the Casino board, which must have the agreement of the consortium bringing together the Czech billionaire Daniel Kretinsky, Fimalac and the English Attestor funds, with which a takeover and refinancing contract (contribution of 1.2 billion in new money, crushing of 5 billion in debt) was signed in July. The buyers will take orders in March. The finalization of the next transfers will be up to them.

“The Kretinsky clan is increasing its pressure,” says a person familiar with the matter. “Jean-Charles Naouri put pressure on himself given the results which are very far from those which had been announced and on the basis of which the recovery plan was built,” corrects another source. The result is the same. “Jean-Charles Naouri will have to make heartbreaking revisions,” analyzes a person close to the file. Its objective of preserving the integrity of the century-old distributor of Saint-Etienne given to him by the Guichard family is moving away.

If the sale of the last supermarkets and hypermarkets bearing the Casino brand were to take place, it would be accompanied by the sale of several warehouses. There would remain the thorny question on the political level of the future of historic seat of Saint-Etienne which employs 2,000 people. Daniel Kretinsky has already mentioned the possibility of hosting research and development activities there. According to our information, not confirmed by the person concerned, he is now considering relocating part of the headquarters of Monoprix and Franprix, the group’s other brands, there. As a reminder, the headquarters also serves Casino’s 7,000 small local stores under the Petit Casino, Vival or Spar brands, which are doing well.

Two billion negative cash flow

On November 22, Casino updated the forecasts of its subsidiary Casino Distribution France (DCF), for the third time since July. The drop in prices does not increase market shares. The week of November 13, supermarket attendance and sales volumes progressed well, by 10% and 7% respectively. But the hypermarket figures erased this gain and plunged the results into the red with 3% fewer customers and 12% fewer purchases.

“In food distribution, the drop in prices takes twelve to eighteen months to increase sales volumes and turnover,” recalls Clément Genelot who believes that Casino has not lowered its prices enough. “They have decreased by 10%, but it remains 20% more expensive than Leclerc. It would take a drop of an additional 10% to reach the level of Carrefour and Auchan,” calculates the analyst.

For the whole of 2023, expectations for the entire group went from July to November from a positive Ebitda of 214 million to a loss of 100 million and from a negative cash flow of 882 million to more than… 2 billion. Lasting another year would require an equivalent amount for Casino supers and hypermarkets. An amount that justifies making a direct decision.

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