Debt-laden French supermarket Casino ends deal talks with Teract

A trio of prominent French businessmen including telecoms billionaire Xavier Niel are working on a plan to rescue heavily indebted French food retailer Casino after talks between the group and smaller rival Teract collapsed.

Casino and Teract said in separate statements on Thursday that they were ending exclusive negotiations that began in early March that would have combined Casino’s French retail operation with Teract, a listed company backed by farmers’ co-operative Invivo.

The arrival in April of a competing offer to invest €1.1bn in Casino led by Czech billionaire Daniel Křetínský, as well as the deterioration of Casino’s operations and financial position, made the Teract deal as originally conceived impossible.

Further complicating matters was Casino’s decision in late May to begin voluntary negotiations with its creditors to restructure its debt — a so-called procedure de conciliation which will last for several months. Through that the company would aim to negotiate a solution both on its debt and for a fresh cash injection from investors, such as Křetínský.

Now Niel, retail entrepreneur Moez-Alexandre Zouari and banker Matthieu Pigasse, who are also shareholders in Teract, are seeking to put together a fresh rival offer to that of Křetínský. They said in a statement on Thursday that they were working on a rescue plan that would include “measures to strengthen Casino Group’s equity and, to the extent necessary, adapt its existing debt to its current capacities and preserve its growth potential”.

They did not say how much money they would be ready to inject in Casino, but appeared to signal they were looking for partners among creditors and hedge funds. “The solution is open to all players interested in participating in the recovery of a long-established retailer . . . while remaining true to its history and identity,” they said.

The fate of France’s sixth-largest food retailer by market share now hangs in the balance, along with the roughly 53,000 employees it has in France, with more globally. Casino’s majority shareholder, Jean-Charles Naouri, is also trying to preserve as much of the company he spent years building via debt-fuelled acquisitions, but is likely to lose control if a large cash injection were finalised, people close to the matter said previously.

Casino and its parent companies are facing €4.9bn in debt repayments due by 2025; credit rating agencies are questioning if these can be met. Moody’s said it believed a default in the next 12 months remained likely “as the company’s liquidity is weak and the capital structure is unsustainable”. 

As part of its effort to cut debt, Casino has also agreed to sell stores with about €1.6bn in annual sales to retailer Groupement Les Mousquetaires, which runs the Intermarché supermarket chain. Casino said on Thursday that the collapse of the Teract talks would not have any impact on the Intermarché deal.