Promodes launches pounds 2.9bn bid for rival
Tuesday 02 September 1997
Analysts said the deal would transform Promodes into France's largest retailer with a market share of more than18 per cent. The combined group would have sales of around Fr170bn and a presence in 15 countries and four continents. It will also catapult Promodes into the top three supermarket groups in France.
Promodes' long-rumoured interest in Casino was fuelled by legislation in France which has made it much harder for supermarket and hypermarket groups to open new outlets. The tightening of planning regulations has already led to the Auchan group taking over Docks de France last year while Carrefour has built up a 41 per cent stake in the Cora chain.
Promodes is offering Fr340 for every Casino ordinary share and Fr270 for every preference share. The Rallye bid is pitched at Fr420 per share.
Analysts said the merger would generate significant economies of scale and vault Promodes from number five to among the top two or three food retailers in France. One analyst estimated the potential cost benefits of the deal at around 0.5 per cent of turnover.
Promodes said the offer represented a premium of 15 per cent to Casino's closing price on Friday and a 19 per cent premium to the average price over the past three months. The Guichard-Perrachon family controls around 12 per cent of Casino's shares.
Casino and Rallye said the bids were unsolicited. They declined to comment on the approach yesterday but said they would announce their responses today after a board meeting.
Euris, controlled by Jearn-Charles Naouri, owns 56 per cent of Rallye, which in turn holds 28 per cent of Casino and 36 per cent of the voting rights.
"If Rallye and the Guichard family don't bring their shares, the bid fails," said a spokeswoman for Casino.
If Promodes pulls off the deals the enlarged company would have net debt of almost Fr30bn. The company said its strong cash-flow would reduce the figure to around Fr16bn after two years.
The deal would increase the pressure on Carrefour, the French hypermarket group.
Simon Raggett, analyst at William de Broe, said the deal was likely to be the last major consolidation in the French retail sector. "The map has deteriorated for Carrefour. It is now faced with two megagroups," he said.
- 1 Snoop Dogg and Jared Leto buy a stake in Reddit as A-list invests $50m
- 2 Prince held a Facebook Q&A and this is the only question he answered
- 3 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 4 Now we know whose fault it is if you end up being murdered in Thailand
- 5 35,000 walrus gather ashore on north-west Alaska beach 'for a rest'
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
The Osborne Ultimatum: Chancellor’s benefits freeze bombshell will affect ten million households
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Should gay sex be illegal? 16% of Britons think so
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Benefits 'smart cards' plan revealed by Iain Duncan Smith to stop claimants spending welfare money on alcohol
- < Previous
- Next >
iJobs Money & Business
£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...