No matter how many articles are written about it, Luxembourg remains one of the best places to be when it comes to structuring transactions, whether on a European or global scale. As the latest example, it was from 2 place de Paris, where the Christmas market was being dismantled on Monday, that the takeover of the Casino group by one of the many companies owned by Czech billionaire Daniel Kretinsky was being put together.
On Monday, the European Commission gave the first green light to this transaction, announced at the end of the year, by ruling on the competition aspects. Only three more are required: the French financial regulator AMF to grant an exemption from the obligation for the consortium to file a draft public offer for Casino shares, the approval of the Ministry of the Economy and the European Commission on foreign subsidy issues.
The court-appointed administrators have also summoned the current shareholders to discuss the proposed capital increase, which is expected to dilute their stakes significantly. But will they really have a choice, given the indebtedness of the French supermarket group? Not really, especially as the major creditors have already agreed to the takeover by a consortium led by EP Equity Investments, controlled by Daniel Kretinsky.
The joint bid with Marc Ladreit de Lacharrière was the latest and only one in the running, following the withdrawal at the weekend of the Niel-Pigasse-Zouari trio. It provides for a €925m capital increase, €1.2bn in new money and, for the time being, no job cuts.
The consortium, comprising EP Equity Investments III, Fimalac and Attestor, has updated its business plan to take account of the updated 2023 forecasts for France and the announcement that it has entered into exclusive negotiations with Auchan Retail and Le Groupement Les Mousquetaires concerning the sale of the majority of Casino’s hypermarkets and supermarkets, which will take place in the second quarter of 2024 for €1.35bn plus property. The shows Ebitda of €126m in 2024 (compared with €316m in the consortium’s previous business plan), rising to €920m in 2028 (compared with €949m in the consortium’s previous business plan).
The next hearing is scheduled for 5 February 2024, before a court decision is handed down on 25 February. “This is a failure on the part of Casino’s management. Today, we have been presented with a debt of €7bn (compared with €6.4bn at the end of 2022)”, Casino’s labour unions (FO, CGT, CFDT, UNSA and CFE-CGC) told the French publicaiton Capital on 11 December.
Originally published in French by and translated for Delano