Casino: conciliation procedure and wish to sell a hundred stores to Intermarché

Europe 1 with AFP / Photo credit: MAUD DUPUY / HANS LUCAS / HANS LUCAS VIA AFP 16:52 p.m., May 26, 2023

The distributor Casino formalized Friday its entry into a conciliation procedure for a period of four months to renegotiate its significant debt, announcing its willingness to sell a hundred supermarkets and hypermarkets to the Intermarché group. "The President of the Paris Commercial Court has decided to open on May 25, 2023 a conciliation procedure" for the benefit of Casino and its subsidiaries including Monoprix and Franprix, "for an initial period of four months, possibly extendable by one month," says the group indebted to the tune of 6.4 billion euros at the end of 2022, including 4.5 on its activity in France.

Casino specifies that this procedure, which should allow it to conclude an agreement with its creditors for a potential restructuring of its debt, "concerns only the financial debt of the company" and certain subsidiaries. It "will have no impact on the group's relations with its operational partners (in particular its suppliers) and employees".

Fall in the stock

This announcement was expected since Casino requested on Tuesday the suspension of the listing of its shares "pending the publication of a press release and until further notice". Trading resumed Friday on the Paris Stock Exchange, where the share was heckled, losing 9.62% to 6.11 euros around 09:10 (07:10 GMT). The share of its parent company Rallye also fell 8% to 0.92 euros. Since the beginning of the year, the title of Casino has lost more than a third of its value and that of Rallye about 65%. Casino, which employs more than 50,000 people in France and 200,000 worldwide under many brands, has been struggling for years to get out of debt, so far without success. The group is nevertheless coveted by billionaire Daniel Kretinsky and the distribution group Teract, whose majority shareholder is the agri-food giant InVivo.

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At the end of April, the third largest supermarket chain in France, Intermarché, joined the talks that were supposed to be concluded by the end of May. In parallel with the opening of the entry into conciliation, Casino announced Friday an agreement with Intermarché for the sale of more than a hundred points of sale "from the perimeter Casino France", including hypermarkets, supermarkets and convenience stores and representing a total of 1.15 billion euros in turnover. This transfer, which remains subject to the agreement of the employee representative bodies and the authorities, would take place in two stages. The "first disposals will take place by the end of this year" and will weigh about 600 million euros in turnover including tax.

Then the following disposals would represent 550 million euros of turnover, Casino having undertaken to carry them out "at the request" of Intermarché and "at the latest within three years", this "period may be accelerated by Casino". For Intermarché, the operation makes it possible to "complete its national network", explained the boss of the group Les Mousquetaires / Intermarché Thierry Cotillard Friday at the microphone of Radio Classique, "and for Casino to refocus on its priority areas", Ile-de-France, Rhône-Alpes and Provence-Alpes-Côte d'Azur.

An equity investment of €100 million

Casino specifies that, "at the signing of the binding agreements, the Les Mousquetaires group would pay Casino a first lump sum payment of 100 million euros, which would be deducted from the final price calculated on the market value of the assets". In addition, Intermarché, which plans to convert some of these stores into discounters of its Netto brand, has "committed to acquire", if Casino requests it within three years, "an additional volume of stores representing 500 million euros of turnover".

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The operation is a cause for concern for the representatives of the employees concerned by this change of brand because the group structures are different between Casino, an integrated group with a more structured social dialogue, and Intermarché, where social policy depends on each store owner, the brand being a group of independents. Casino also specifies that Intermarché "will participate" in a "future round of funding of the Casino group, with an equity investment of 100 million euros", and that this agreement is "compatible with the discussions currently underway with Teract on the industrial project initiated a few months ago, as well as with any additional capital operations".