Groupe Casino Guichard-perrachon Sa
Groupe Casino (CO FP) is one of the most overvalued and misunderstood companies we have ever come across. The basic problem with Casino is that its financial statements are literally meaningless to understanding the company’s (poor) health. They do not distinguish between what Casino owns and what it owes. (Spoiler: we estimate Casino’s LTM leverage ratio at 8.9x.)
Casino’s controlling shareholder Jean-Charles Naouri is a genius. He won first prizes in France’s high school Latin and Greek exams, completed his baccalaureate degree at 15, and earned a PhD in math in only one year. Like the geniuses who founded the hedge fund Long-Term Capital Management, which spectacularly collapsed, Mr. Naouri has an affinity for leverage. One would expect Casino to be a relatively boring hypermarket retailer; however, together with its parent, Rallye SA (RAL FP), Casino increasingly resembles a highly levered hedge fund. One example is Casino’s total return swaps on listed equities, which we estimate have a mark-to-market loss of approximately €500 million.
Casino and Rallye are now experiencing their version of a “six sigma event”, with emerging markets (80% of consolidated EBITDA) unwinding, currencies selling-off, and a sharply deteriorating core business. Casino obfuscates these problems by (i) adding complexity to its already convoluted structure and financials, (ii) engaging in financial engineering to improve the optics of its financials, and (iii) by hollowing out the productive value of the businesses in order to keep Rallye from collapsing.
Our report peels away many layers of the onion to show that Casino is dangerously leveraged, and is being managed for the very short-term. We explain that Casino’s shares are worth as little as €6.91, and correspondingly, the shares of Rallye are likely going to zero. If Casino trades at our estimated value of €6.91, the recovery on Rallye’s bonds should be about €0.15.
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About Casino Guichard Perrachon SA. Casino Guichard Perrachon SA is a France-based food retailer company that manages stores in France and abroad. About Casino Guichard Perrachon SA. Casino Guichard Perrachon SA is a France-based food retailer company that manages stores in France and abroad. French retailing group Casino's Brazilian. You are in the investor relations area of the Group Casino. We are at your disposal to answer your specific requests. Casino Group Investor Relations Department M Lionel BENCHIMOL IRCasino@groupe-casino.fr 01.53.65.24.17.
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September 13th, 2019
Casino Group pursues the implementation of its simplification project in Latin America by signing agreements with GPA and Éxito in view of the forthcoming launch by GPA of an all-cash tender offer on Éxito
Casino announces the successful completion of the corporate approvals necessary to the launch by GPA of an all-cash tender offer on Éxito and the acquisition by Casino of the shares held by Éxito in Segisor (which itself holds directly and indirectly 99.9% of the voting rights and 37.3% of the economic rights in GPA).
Yesterday, Éxito’s Board of Directors (unanimously) and Éxito’s General Shareholders’ Meeting approved the sale to Casino of all shares held by Éxito in Segisor in the terms announced on August 19th, 2019.
Accordingly, Casino has signed:
- A pre-agreement with GPA pursuant to which (i) GPA shall launch, through a wholly-owned subsidiary, an all-cash tender offer to acquire up to 100% of Éxito at 18,000 COP per share and (ii) Casino shall tender its entire stake (55.3%);
- The share purchase agreement with Éxito pursuant to which Casino would acquire the shares held by Éxito in Segisor.
The closing of the share purchase agreement with Éxito is subject to the allocation (Adjudicación) of GPA’s tender offer on Éxito.
CASINO GROUP
Groupe Casino Guichard-perrachon San Diego
ANALYST AND INVESTOR CONTACTS:
Régine GAGGIOLI - rgaggioli@groupe-casino.fr - +33 (0)1 53 65 64 17
Or
+33 (0)1 53 65 24 17 - IR_Casino@groupe-casino.fr
PRESS CONTACTS:
Casino Group – Direction of Communication
Stéphanie ABADIE - sabadie@groupe-casino.fr - +33 (0)6 26 27 37 05
Or
+33(0)1 53 65 24 78 - directiondelacommunication@groupe-casino.fr
Agence IMAGE 7
Karine ALLOUIS - kallouis@image7.fr
Grégoire LUCAS - gregoire.lucas@image7.fr
- 33(0)1 53 70 74 84
Disclaimer
This press release was prepared solely for information purposes and should not be construed as a solicitation or an offer to buy or sell securities or related financial instruments. Similarly, it does not give and should not be treated as giving investment advice. It has no connection with the investment objectives, financial situation or specific needs of any recipient. No representation or warranty, either express or implicit, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for exercise of their own judgement. All opinions expressed herein are subject to change without notice.
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Groupe Casino Guichard-perrachon Sa Stock
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