Carrefour Denies Making Merger Proposal to Casino -- Update

   By Pietro Lombardi and Anthony Shevlin 
 

Carrefour SA (CA.FR) on Monday strongly denied having made a takeover approach to Casino Guichard-Perrachon SA (CO.FR) after the latter said late Sunday that its board had rejected entreaties from Carrefour "with a view to a possible combination."

"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.

"Focused on the implementation of its 2022 transformation plan, Carrefour is reviewing its legal options in order to stop these unacceptable innuendoes," it said.

The denial comes after Casino said its board had met Sunday and unanimously decided to "reject Carrefour's approach."

"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.

Casino, which is based in the French city of Saint-Etienne, said it "acknowledged the barriers, in France and in Brazil, to a combination with Carrefour, especially in terms of competition and employment."

Last week Casino's parent company Rallye SA (RAL.FR) signed a 500 million-euro ($587.3 million) credit line due in June 2020, dispelling fears of a short-term liquidity crunch. However, in order to deal with its medium-term debt concerns, Casino may need to sell off assets.

Analysts at Bernstein believe that Casino needs to sell assets "well above the current implied value," adding that the French retailer's weakened share price could hinder Rallye's ability to refinance all its liabilities.

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

Carrefour, Europe's biggest retailer by revenue, is currently in the midst of an aggressive transformation plan as it looks to cut jobs, form new partnerships and reduce costs in an effort to shore up its faltering performance.

Write to Pietro Lombardi at [e-mail] and Anthony Shevlin at [e-mail]

(END) Dow Jones Newswires

September 24, 2018 02:34 ET (06:34 GMT)

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