Intermarché and Auchan open talks on buying Casino stores

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

French retailers Intermarché and Auchan have entered exclusive negotiations to buy Casino’s hyper and supermarket stores as the indebted group rushes to shed the lossmaking assets ahead of a bailout led by Czech businessman Daniel Křetínský. 

The deal, which could close before the end of the year, values the network of 313 stores at €1.35bn, excluding real estate, though certain assets could come to be included in the transaction, Casino said in a statement. The deal would be subject to completion of the group’s financial restructuring, which is expected to take place in the first quarter of next year, as well as approval from regulators.

“The proceeds will be used to support the planned financial restructuring, investment in the retained perimeter, and social support for the concerned employees,” Casino said in a statement, adding that Křetínský and his partners had given their blessing to the talks. 

Employees of the stores in question, which had sales of €3.6bn excluding VAT last year, will transfer to Auchan and Groupement Les Mousquetaires, Intermarché’s parent company.

Casino said it had received preliminary offers for its hyper and supermarket stores from a number of interested parties at the end of last month. Already in May Intermarché had agreed to buying some 60 stores from Casino. Initially rival retailers, including Carrefour and Lidl, were among those who had expressed interest, according to people with knowledge of the process. 

Casino shares have been suspended since Monday morning, pending an announcement. They resume trading on Tuesday. They have already lost more than 92 per cent of their value so far this year, giving the company a market value of just €90mn today. 

Křetínský, who will take control of the company once a debt restructuring and rescue deal are finalised in the coming months, had pushed Casino’s management to sell the retailer’s largest stores months before his planned bailout, the Financial Times reported last month. 

Once completed, the divestments will radically reduce the size of the group, capping years of asset sales that chief executive Jean-Charles Naouri undertook to pay down debt. The group’s remaining assets would mostly comprise smaller inner-city stores such as Monoprix in Paris.

Rival bidders accused Křetínský of wanting to strip the group’s assets when his offer to take over the company won out over the summer. In an interview in July, he vowed to “preserve the maximum possible, rational perimeter” of the group. But people close to the Czech said that, given the deteriorating performance at the large-format stores, the need to sell them had been all but inevitable. 

After building Casino for decades through debt-fuelled acquisitions, Naouri brought it to the brink of default as the underlying business faltered before the company was put into a court-supervised debt restructuring process earlier this year.  

Casino has been losing ground as rivals E Leclerc, Intermarché and Système U gain market share, according to data from Kantar. 

The changes have also provoked unrest among the retailer’s workers and suppliers, anxious about job cuts and the potential closure of the group’s headquarters in Saint-Etienne should the group be dismantled. 

People close to Křetínský have said he would maintain the historic seat, albeit at a reduced size, but analysts have speculated that a closure remains likely. Some 2,000 people — largely workers and union representatives joined by local politicians — protested near the company’s headquarters on Sunday. Finance ministry officials have also been wary about how the changes at the group will affect jobs. Casino employs more than 50,000 people in France.