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Casino Group to sell Big C stake to Thai TCC Group - sources

[HONG KONG] France's Casino Group has agreed to sell its majority stake in Thai hypermarket operator Big C Supercenter for about US$3.4 billion to Thailand's TCC Group, a person with direct knowledge of the matter said on Sunday.

The deal is a part of the French food retailer's debt reduction plan. Casino announced a US$4.46 billion deleveraging plan in 2016, including the sale of its Vietnam unit and its stake in the Thai hypermarket.

Casino's plan to sell the Thai unit came after a December report by short-seller Muddy Waters that said the French firm was "dangerously leveraged", prompting its worst stock slide in seven years. The Vietnam unit sale had been planned earlier.

A senior official from Central Group, which was also bidding for Casino's 58.6 per cent stake in Big C, confirmed that the group had lost to TCC in the bid.

The first source, who did not want to be identified, said TCC - controlled by Thai tycoon Charoen Sirivadhanabhakdi - had offered US$7.12 a share for the controlling stake, or around 11 per cent more than Big C shares' close on Friday.

The Big C deal would make for Thailand's second-biggest inbound acquisition after 2013's US$6.6-billion purchase by CP All PCL of cash-and-carry wholesaler Siam Makro Pcl.

The Wall Street Journal earlier reported the deal.

It was not clear whether Central Group would sell its 25 per cent stake in Big C, a retailer it originally founded in 1993 and then sold a majority stake to Casino in 1999.

Central declined to comment on the matter. Casino, TCC and Big C were not available for immediate comment.

The first source said Casino and TCC had moved quickly to present binding bids and financing to preempt others coming in.

REUTERS