One of the biggest supermarket groups in France Carrefour has reportedly denied having approached opponent Casino for a plausible partnership. As per trusted sources, Casino claimed that its board had collectively agreed to reject a tie-up approach from Carrefour.
The difficulties being presently faced by Casino and its stakeholders might have prompted the groundless and misleading communications, Carrefour alleged.
According to sources familiar with the matter, similar to its counterparts, Casino is striving to survive among rising competition, especially from discounters. As a result, its shares have plunged by almost a third this year. Many investors predict that its share price would decrease even further, through a trade known as short-selling.
One of the investors, Muddy Waters even called out Casino and its parent company Rallye for having a convoluted structure and complex financial arrangements. Even if Carrefour had agreed to have approached Casino, any deal would have gone through regulatory scrutiny since both the firms are large players in the French retail market.
However, a news release by Reuters states that there had been a meeting in September between Carrefour’s head Alexandre Bompard and Casino’s chief Jean-Charles Naouri to discuss a wide range of topics related to opportunities for the two.
For the record, Carrefour is the second-largest retailer in France with a 20.4% share of the market, while E. Leclerc is the first with a 21.1% share. Reportedly, Casino is the fourth largest with an 11.6% market share.
A retail analyst at Bernstein, Bruno Monteyne was quoted saying that the alleged approach makes no sense as the anti-trust issues that exist in both France and Brazil are big enough to make a deal uneconomical. All these conditions make it hard to believe that Carrefour would make such a move.
Casino’s shares plunged by 1.9 percent, while Carrefour shares registered an increase of 0.5 percent following the release of contradictory news, cite sources.