Casino and Carrefour in dispute over merger claim
Casino statement on approach by larger rival contradicted by Carrefour
French retailer Casino has become embroiled in a war of words with Carrefour after it claimed it had rejected an approach from its larger rival over a possible tie-up.
Casino said on Sunday night that it had been “contacted over the last few days with a view to a possible combination”. It said its board of directors met on Sunday and “unanimously” rejected the approach.
But Casino’s statement was contradicted by Carrefour, the world’s second-largest retailer by revenues.
In a contrasting separate statement on Monday morning, Carrefour said: “Carrefour denies having solicited Casino and is surprised that a merger proposal that does not exist has been submitted to Casino’s board of directors.”
It added: “Focused on the implementation of its 2022 transformation plan, Carrefour is reviewing its legal options in order to stop these unacceptable innuendos.”
A Casino-Carrefour tie-up would have combined two of the biggest names in the highly competitive French food retail market, where players are seeking to eke out profits amid a multiyear price war and ramp up their e-commerce offerings to resist the march of Amazon.
A spokesperson for Casino said the retailer’s chief executive Jean-Charles Naouri and his counterpart at Carrefour Alexandre Bompard met in Paris on September 12. After that meeting, the chief executives had “designated counsel” to advise them. Carrefour declined to comment on this statement.
According to two people familiar with the situation, the meeting between the two executives was organised by Alain Minc, a businessman and political adviser, and took place at Mr Minc’s offices in Paris. Mr Minc did not immediately respond to a request for comment.
Casino’s share price has plummeted this year, reflecting investor concerns over its high levels of debt and the structural complexity with which its chief executive and controlling shareholder Jean-Charles Naouri has built the group.
Just over a week ago, Casino’s parent company Rallye announced it had secured a €500m credit line from French banks to strengthen its financial position, pushing Rallye’s shares up 7 per cent. Casino’s shares rallied slightly but are still down almost a third this year.
Speaking at the FT Future of Retail summit in London on Thursday, Régis Schultz, chief executive of Casino’s upmarket urban brand Monoprix that is responsible for half of its profits in France, blamed bearish analysts and hedge funds who are shorting the stock for the big moves in Casino’s share price.
Mr Schultz said: “[Hedge funds] want to make short-term money, that’s it. It’s speculation.”
He added: “We have no problem of access to funding.”
Casino’s statement on Sunday said: “Carrefour’s approach occurs at a time when the market for Casino’s securities has been subjected to co-ordinated downward speculative manipulations of an unprecedented scale over the course of the past several months.”
Carrefour is undergoing an ambitious 2022 transformation under Alexandre Bompard, who took over as chief executive in July last year, aimed at cutting costs and improving its omni-channel offering to restore the vast retailer to profitability.