French supermarket retailer Casino is targeting a further €2 billion of asset sales as it steps up plans to cut debt and improve its financial performance.
Casino has been struggling during a tough business climate in France, where the impact of a price war among the big supermarket operators has dented retailers’ profit margins.
“The board of directors has validated the arbitration of assets whose disposal would be a source of value creation,” Casino said in a statement explaining the strategy.
“As a result, new asset disposals for a target amount of €2 billion have been identified, with this second phase of the disposal plan to be completed by the end of Q1, 2021.”
“The move should allow Casino to free up cash and to focus more on lucrative business lines such as e-commerce and stores located in city centres as opposed to out-of-town hypermarkets,” said Meriem Mokdad, a fund manager at Roche Brune Asset Management in Paris.
The new asset sales are in addition to the company’s existing plan to sell off €2.5 billion of assets by the first quarter of 2020. Casino has already signed agreements for sales worth €2.1 billion.
The sales so far consist mainly of the disposal of non-core supermarkets or property assets to private equity investors. Casino has also been looking to simplify its Latin American operations.
In May, Casino’s parent company Rallye (was placed under protection from creditors.
Casino’s net debts stood at €4.7 billion at the end of June.
RPA Perspective Groupe Casino today unveiled an improved offer for Exito’s 50% stake in Brazil’s GPA, which are indirectly held through French company Segisor. Casino had initially made an offer in July, as part of its plans to simplify its corporate structure in Latin America.
The new offer has a buyout price of 113 reals per GPA share, up from its previous offer of 109 reals per share. It is also introducing a partial purchase price matching clause (equal to 80% of the price difference) for the additional GPA shares that Casino would indirectly acquire from Éxito “in case of disposal of all or part of such shares above 113 BRL per share within 15 months”.
Casino said the new offer follows discussions with Exito’s management and the Chairman of its Board of Directors. The amended offer is valid until 27 August 2019.
Casino Group and GBH announced in July a unilateral purchase agreement to sell Vindémia, for an enterprise value of €219 million.
Founded in 1972 in Reunion Island and gradually acquired by Casino Group between 2001 and 2007, Vindémia is the leading retailer in the Indian Ocean (Reunion Island, Madagascar, Mayotte, Mauritius) and enjoys a multi-format positioning (hypermarkets, supermarkets, cash and carry and proximity).
GBH, a family group founded in 1960, has developed from the overseas departments and internationally, at first on industrial activities and later around two businesses, automotive distribution and retail.
