French Retailer Carrefour Denies Takeover Talks With Rival Casino -- 3rd Update

By Nick Kostov 

Casino Guichard-Perrachon SA, also known as Casino Group, said late Sunday its board had rejected entreaties from Carrefour SA about a possible combination that would merge two of France's best-known retail giants.

But Carrefour denied having solicited Casino, accusing the rival of "untimely, misleading and groundless communications."

Casino's release said Carrefour had approached the company in recent days with its proposal, and that the Casino board met on Sunday to consider the idea. "Casino thus intends to take all necessary action to defend the group's corporate interest, and its structural integrity, a key factor for the success of its strategy," the company said.

In a separate news release, sent hours later, Carrefour denied having solicited Casino, and was "surprised that Casino's board of directors would have been submitted a merger proposal that does not exist." A spokesman for Carrefour declined to comment beyond their statement.

Both Casino and Carrefour have struggled to boost margins in their cut-throat domestic market where online shopping, discounters and meal-delivery services are all eating into once reliable profit margins. Both also have lately been investing heavily in their e-commerce offerings to ward off mounting competition from Amazon.com Inc. and other rivals.

Casino's share price has fallen 29% since the beginning of 2018, in part because of investor concerns about the company's debt. Casino also has been a target of target of hedge funds who have shorted the stock.

Casino "acknowledged the barriers, in France and in Brazil, to a combination with Carrefour, especially in terms of competition and employment."

"We stand by every word and every comma of our press release," a spokesman for Casino said. "There was a meeting between the two CEOs on the morning of September 12 at 8:30 a.m. in Paris. Both sides then hired lawyers to advise them and they also talked."

Last summer, Carrefour named Alexandre Bompard as chief executive, tapping someone who had gone toe-to-toe with Amazon.com Inc. when he was at the helm of book, music and electronics retailer Fnac Darty to help close its e-commerce gap. Mr. Bompard announced a five-year growth strategy in January that included a pledge to invest EUR2.8 billion ($3.28 billion) in digital commerce by 2022, and a target of EUR5 billion in sales in food e-commerce in five years -- a six-fold increase over last year.

Write to Nick Kostov at [e-mail]

(END) Dow Jones Newswires

September 24, 2018 03:50 ET (07:50 GMT)

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