Thailand's TCC Group to Buy Groupe Casino's Stake in Big C -- Update
February 07 2016 - 5:20AM
Dow Jones News
By Nick Kostov in Paris and P.R. Venkat in Singapore
Groupe Casino SA has agreed to sell its stake in Thai
hypermarket operator Big C Supercenter PLC for EUR3.1 billion
($3.46 billion) to a Thai billionaire, according to people familiar
with the matter, marking a major step in the French grocer's plans
to cut its debt.
Thai tycoon Charoen Sirivadhanabhakdi's holding company, TCC
Group, will buy Casino's 58.6% stake in Big C Thailand for 252.88
baht a share ($7.10), these people said. They added that an
agreement between the two could be announced before the market
opens in Asia on Monday morning. At that price, Mr. Charoen's offer
values Big C close to US$5.86 billion.
The sale is a key step in Casino's attempts to reduce its debt
pile. The retailer launched a EUR4 billion deleveraging plan in
2016 which includes selling its stake in the Thai supermarket as
well as Vietnam retail assets. Ratings agency Standard & Poor's
in January put the French retailer's debt on "negative watch" for a
possible downgrade to junk status, citing concerns over weakness in
Brazil and the retailer's debt pile.
The sale, which is expected to complete by March 31, will allow
Casino to hit 80% of its EUR4 billion deleveraging target, the
people said.
Casino makes around 40% of its sales in Latin America, where a
prolonged recession in Brazil has led to falling sales and
declining profitability. Management remains bullish on Brazil, but
the slowdown has made it more difficult for Casino to support the
same level of debt.
In December, the grocer revealed plans to sell its Vietnamese
retail operation and some of its real estate holdings in
Colombia--sales of which are ongoing.
In the process of selling its Vietnam unit, Casino received a
number of expressions of interest for its larger Thai unit and
decided to sell that asset as well. Thailand's largest retail
conglomerate Central Group, which owns about a quarter of Big C
Thailand, lost out in the bidding for Casino's stake, people
familiar with the process said.
For Mr. Charoen, the deal boosts his retail presence in
Thailand. He already owns a listed consumer products company called
Berli Jucker PCL, which has interests from trading to packaging and
retail. Last month, Mr. Charoen's TCC Group closed a EUR655 million
acquisition of Metro Group's cash & carry wholesale business in
Vietnam.
In recent years, deal-hungry Thai tycoons like Mr. Charoen, the
son of an ethnic Chinese street vendor in Bangkok, have been among
the biggest spenders in the region.
Mr. Charoen started a small distillery with partners after
dropping out of school and successfully bid for government liquor
concessions in Thailand. Since then, he has expanded his business
to include wide-ranging interests from real estate to finance and
agriculture. He became a household name in 2013 when he bought a
controlling stake in Singapore-listed conglomerate Fraser &
Neave that valued the firm at $11 billion.
Casino entered the Thai market in 1999 when it acquired a stake
in Big C, before adding rival Carrefour SA's Thai operations in
early 2011. Big C is now Thailand's second-largest hypermarket
operator after Tesco PLC's Thai unit.
As of September last year, Big C and its subsidiaries operated
697 stores in Thailand. The company posted net profit of $38
million for the third quarter ended in September, down 14.5% over
the same period last year.
Write to Nick Kostov at Nick.Kostov@wsj.com and P.R. Venkat at
venkat.pr@wsj.com
(END) Dow Jones Newswires
February 07, 2016 05:05 ET (10:05 GMT)
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