“Since when has Casino been run like a ZAD?” The question took Jean-Charles Naouri and his teams by surprise. “I have been criticized a lot, but this is the first time,” replied, stung, the boss of the distribution group. On May 10, the shareholders gathered in general assembly at the Maison de la Chimie, in Paris, were numerous to rebel. Against thefts on the shelves. The advertising of competitor Leclerc which points to the alleged high cost of Casino signs. The filth of the stores. But even more, against the absence of dividends, the collapse of the stock market after an 80% drop in three years, and the group’s net debt, abysmal: 5.1 billion euros at the end of March.
In the aftermath of a further downgrading of its rating by Standard & Poor’s, management had no choice but to keep a low profile. “Deleveraging is a priority,” insisted CFO David Lubek. Time is running out as a €553 million covered bond redemption deadline approaches in January 2024. The €10 billion in asset disposals in recent years have not been enough to mop up the slate , and the increasingly severe judgment of the rating agencies is hampering the group’s access to new financing.
Beautiful brands arouse covetousness
The latest quarterly sales figures have heightened concerns, weighed down by the poor performance of hypermarkets. This large format is no longer successful, a fortiori in “an inflationary context which benefits brands whose price image is better positioned, such as Leclerc or the discounters Lidl and Aldi”, explains Etienne Sebaux, from the consulting firm AlixPartners. However, the Saint-Etienne distributor retains solid assets. “It’s a group with great brands, like Monoprix, with premium positions in the city center, and a stock market value well below the ratios that prevail in the industry”, continues Etienne Sebaux.
Casino: flushed shareholders.
© / Art Press
What arouse some envy. Jean-Charles Naouri began discussions with Teract, a newcomer to the Paris Stock Exchange, which became exclusive in March. In its capital, figures with a view to capitalism, such as the technophile Xavier Niel, the financier Matthieu Pigasse and the distribution pro Moez-Alexandre Zouari, Casino’s first franchisee. But it is the group of agricultural cooperatives InVivo – 13 billion euros in turnover expected this year – which leads the boat, with 76% of the shares. Europe’s leading cereal exporter, France’s third-largest wine merchant and perhaps soon the world leader in malt production, InVivo has housed its distribution activities in Teract, namely garden centers – Gamm vert, Jardiland… –, small food chains such as Grand Marché La Marnière, or even, since last September, the Boulangerie Louise network, in Hauts-de-France, called to deploy in France.
“We want to demonstrate that a farmer-retailer concept makes sense. Today, there is room for this model in distribution in France”, affirms Thierry Blandinières, head of InVivo for ten years after having headed successively Madrange, Delpeyrat and the southwestern agricultural cooperative Maïsadour. His idea: to move towards a less “hyper” and more “market” format, with common supply channels, the installation of artisan bakeries in Casino stores, more high-end fruit and vegetables harvested near the points of sale. sale… Control of the entire value chain, from field to supermarket, from wheat to baguette. Short circuits, food sovereignty, promotion of upstream production: the project is in tune with the times. “We are ready for multi-annual negotiations, to bring visibility to farmers,” adds Thierry Blandinières. “We must reinvest in stores, correct the price image, highlight our products and our businesses, adds Moez-Alexandre Zouari. We are bringing a new commercial dynamic and want to get out of the pattern where manufacturers set their law.” Already a partner of Casino with a common purchasing centre, the Les Mousquetaires group recently joined the discussions.
Daniel Kretinsky welcome to the capital, when the time comes
From a capital point of view, the negotiation could lead to the creation of a new company – probably listed on the stock exchange – controlled by Casino and equipped with its brands in France, in addition to the Teract stores, for a total of 14 billion dollars. euros in turnover. Battalions of advisers and lawyers are on hand to validate the feasibility of the file, while the exclusivity period ends on June 8. “The principle of a merger is acquired. We are studying the economic model, calculating the synergies”, specifies the boss of InVivo. It is up to Casino to settle its debt problem.
Present in the capital of Fnac Darty and owner of several French media, Daniel Kretinsky has offered his good offices by joining forces with Marc Ladreit de Lacharrière with a view to a capital increase of 1.1 billion euros, a massive bet in view of market capitalization of Casino, around 740 million. By providing 750 million euros alone, the Czech billionaire would take control of the group, of which he already owns 10%, at the cost of a strong dilution of existing shareholders. Are the two approaches compatible? “We approached the subject with what seems essential to us, the industrial project to relaunch Casino. And the money, we will find it, assures Moez-Alexandre Zouari. Our project needs 500 million euros and more, and if Daniel Kretinsky wishes to join us, he is welcome.” The door is open.