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Retailer Casino's parent Rallye gets offer for 'Courir' sports arm

[PARIS] Rallye, the holding company that controls French supermarket retailer Casino, has received an offer for its 'Courir' sports brand, with both companies keen to sell assets and cut debts that have concerned some investors.

Private equity firm Equistone Partners Europe had made a binding offer for Courir for an equity value of 283 million euros (S$448 million), and the deal could be completed in the first half of 2019, Rallye said on Monday.

Shares in Rallye rose 3.8 per cent, while Casino shares edged up 0.5 per cent.

Analysts at brokerage Raymond James said the Courir sale was a positive move, in the broader context of Rallye and Casino's restructuring, but added there was still work to do.

"Disposal of Courir is positive, but Casino dividend remains central," it wrote in a note, keeping a "market perform" rating on Rallye shares.

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The sale of Courir marks the latest planned asset disposal by Casino and Rallye to ease concerns over their financial position, with Casino shares having fallen some 20 per cent so far in 2018 on concerns over debts at both companies.

Worries over those debts have led to hedge funds targeting Casino by betting on its shares falling further in future.

Within the Casino group, dividends from Casino are used to maintain Rallye's debt interest payments. The shares of Casino that are held by Rallye are also pledged as collateral to banks in order for Rallye to obtain more financing.

Earlier this month, Casino agreed to sell some properties of its Monoprix chain for 565 million euros, while in September five banks granted Rallye a new 500 million euro credit line.

Last week, Casino reported that sales growth had accelerated in the third quarter, and it also kept its annual financial targets.


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