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Retailer Casino says it rejected Carrefour approach, which Carrefour denies

[PARIS] French supermarket retailer Casino, whose shares have hit by concerns over its debt, said it had rejected an approach from domestic rival Carrefour - something that Carrefour itself denied late on Sunday.

Casino said it had been contacted by Carrefour in recent days over a possible tie-up, but noted regulatory hurdles to any such deal, given the relative dominance of the two companies in the French domestic supermarket sector.

"The board unanimously reiterated its entire confidence in Casino's strategy for value creation based on its unique market positioning," Casino said in a statement issued late on Sunday.

"The board of directors also acknowledged the barriers, in France and in Brazil, to a combination with Carrefour, especially in terms of competition and employment. The board unanimously decided to reject Carrefour's approach," added Casino.

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However, Carrefour denied in a separate statement having ever "solicited" Casino.

"Carrefour denies having solicited Casino and is surprised that Casino's board of directors would have been submitted a merger proposal that does not exist," Carrefour said in a statement.

"The difficulties faced by Casino and its controlling shareholder may not justify untimely, misleading and groundless communications."

Carrefour has a current market capitalisation of around 13 billion euros (S$20.9 billion), while Casino's market capitalisation stands at around 4 billion euros.

Casino has come under pressure over the debts at the company and debts at parent holding group Rallye.

Rallye, through which Chief Executive Jean-Charles Naouri controls Casino, needs to repay over 600 million euros worth of bonds in October and 300 million euros worth in March.

Last week, five banks granted Rallye a new 500 million euros credit line, while Casino has also been selling off assets in order to cut debts.

In January, Carrefour announced plans to cut costs and jobs, boost e-commerce investment and seek a partnership in China, in an effort to lift profit and revenue, and beat domestic rivals in the race to develop digital shopping products.

Carrefour also struck a global purchasing alliance with Tesco in July.

REUTERS

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