Casino says it rejected Carrefour takeover approach
Carrefour denies push for deal to combine two big names in French food retail
French retailer Casino, whose stock price has fallen by almost a third this year, said on Sunday night that it had been approached over the past few days by larger rival Carrefour about a possible tie-up but its board unanimously decided to “reject Carrefour’s approach”.
Carrefour, the world’s second-largest retailer by revenues, denied having made any such approach.
Such a deal 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.
Casino said in a statement that its board of directors met on Sunday and “unanimously reiterated its entire confidence in Casino’s strategy for value creation based on its unique market positioning”.
It added: “Casino thus intends to take all necessary action to defend the group’s corporate interest, and its structural integrity.”
In a 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.”
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. We have too much liquidity in fact, based on the fact that we need to cover for all this bullshit.”
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.