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Czech billionaire Daniel Kretinsky proposes €1.1bn investment in Casino

Czech billionaire Daniel Kretinsky has pitched a €1.1bn funding in closely indebted French grocery store group On line casino, in a problem to the present controlling shareholder Jean-Charles Naouri.

The shock supply from On line casino’s second-biggest shareholder comes as Naouri is already in unique deal talks to mix its French retail enterprise with Teract, a smaller meals retailer backed by a trio of outstanding French businessmen.

On line casino, which Naouri controls through a 51 per cent stake, stated on Monday that it “acknowledged the proposal” from Kretinsky and stated it might “result in a change of management of On line casino and to a dilution which could be very important for present shareholders”.

On line casino stated it was additionally contemplating asking for a mediator to be appointed to supervise the negotiations with Kretinsky in addition to the proposed Teract deal, each of which might require the log off of its financial institution lenders and bondholders.

If finalised, the supply from Kretinsky would supply On line casino with an injection of recent capital. Nonetheless, it might additionally enhance Kretinsky’s stake in On line casino to about 40 per cent, making him the biggest shareholder, in line with folks briefed on the proposals. Naouri has beforehand rejected different potential offers, reminiscent of with bigger rival Carrefour, that might have led him to lose management over the meals retailer he spent many years constructing.

It stays to be seen if Kretinsky’s transfer will throw a wrench in On line casino’s plans to tie-up with Teract, however two folks near the scenario stated Naouri was unlikely to simply accept dropping management over On line casino. Kretinsky made the unsolicited supply in response to the developments with Teract, and it was not one thing that Naouri sought out, they stated.

Each On line casino and the 4 dad or mum firms via which Naouri controls the meals retailer face a looming wall of debt repayments. On line casino, which owns the Franprix and Monoprix chains, should pay again €1.2bn in debt maturities in 2024 and €1.8bn in 2025. Rallye, the holding firm via which Naouri controls On line casino, entered a court-protected restructuring in 2019.

Daniel Kretinsky is On line casino’s second-biggest shareholder © Thomas Samson/AFP through Getty Pictures

In a separate announcement on Monday On line casino stated it was persevering with unique negotiations with Teract looking for to finalise a deal that might hive off On line casino’s French retail community and mix it with Teract’s natural meals and backyard centre enterprise, whereas injecting as much as €500mn in new funding into the operation.

Teract was shaped in a Spac deal involving Invivo, a farmers’ co-operative, and entrepreneur Moez-Alexandre Zouari, tech billionaire Xavier Niel and funding banker Matthieu Pigasse.

In a lift for that potential tie-up, Groupement Les Mousquetaires, which operates Intermarche, the third-biggest grocery store chain in France, stated it was contemplating investing within the new group. It is usually in discussions to increase its buying alliance with On line casino by two years to 2028.

Clément Genelot, analyst at Bryan Garnier & Co, known as Kretinsky’s proposal “very shocking as Mr Kretinsky has at all times been fairly discreet”.

“In all instances, Mr Naouri now appears more and more set to lose his grip on On line casino faster-than-initially anticipated with renewed chapter dangers on his holdings above,” Genelot added.

Beneath Kretinsky’s proposals, EP International Commerce — an entity affiliated along with his funding car VESA Fairness Funding, which owns 10 per cent of the retail group — would inject as much as €750mn in further capital in On line casino. Fimalac, one other On line casino investor managed by French businessman Marc Ladreit de Lacharrière, would inject as much as €150mn, whereas different present On line casino shareholders would put in as much as €200mn.

The proposal would additionally embrace money repurchases of On line casino’s unsecured debt, changing it into fairness. The corporate’s collectors would additionally must log off on any change of management.

On line casino shares, that are down over 60 per cent up to now 12 months, gained 2.4 per cent in morning buying and selling in Paris.