InVivo seeks longer-term control in Casino-Teract retail tie-up (updated)

Teract SA

10/03/2023 16:50

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    By Gus Trompiz and Sybille de La Hamaide
       PARIS, March 10 (Reuters) - Agribusiness cooperative
InVivo wants to have the possibility in the medium term to take
control of a French retail grouping being negotiated between
Casino  CASP.PA  and Teract  TRACT.PA , InVivo Chief Executive
Thierry Blandinieres said on Friday.
    Debt-laden supermarket chain Casino and smaller food
retailer Teract, which is majority owned by InVivo, have entered
exclusive talks aimed at creating a retail network controlled by
Casino and a food business controlled by InVivo.
    "We're taking a minority stake but we could become the
majority owner in future," Blandinieres said of the potential
retail tie-up between Casino and Teract.
    "It would be a potential option in a three to five year
timeline," he told Reuters.
        Asked if having a possibility to obtain a majority stake
was a condition for InVivo in reaching an agreement with Casino,
he said: "yes".
    Announcing their exclusive negotiations late on Thursday,
Casino and Teract said that the activities they would bring to
the merger were valued, respectively, at 85% and 15% of the
entity on a debt-free, cash-free basis. 
        Blandinieres declined to estimate what minority stake
InVivo may acquire initially in the food retail grouping, saying
it would also depend on debt and other financial adjustments.
  
        Casino, controlled by French businessman Jean-Charles
Naouri, has been selling assets to cut its debt and reassure
investors. It reported consolidated net debt of 6 billion euros
($6.41 billion) for the end of 2022. 
  
        InVivo is seeking to limit the amount of Casino's debt
attributed to the planned French retail business so that its
initial debt over core earnings (EBITDA) ratio does not exceed
around 2-2.5, Blandinieres said.
  
        Casino and Teract also specified in their announcement
that 500 million euros in equity would be injected in the new
venture to support growth and talks with investors were under
way to also become shareholders.
  
        These would mostly be financial investors, Blandinieres
added, declining to give further details.
  
        
  

 (Reporting by Gus Trompiz and Sybille de La Hamaide, Editing by
Louise Heavens and Aurora Ellis)
 ((gus.trompiz@thomsonreuters.com; +33 1 49 49 52 18; Reuters
Messaging: gus.trompiz.thomsonreuters.com@reuters.net))