PARIS French business leaders Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari have expressed an interest in bidding up to 1.1 billion euros ($1.2 billion) for Casino, potentially offering an alternative lifeline for the indebted French supermarket group.
The trio had signalled last week they were readying an offer for Casino after tie-up talks between the company and smaller retail rival Teract collapsed.
Casino, which last month started court-backed negotiations with its creditors, said on Wednesday the three would invest between 200 and 300 million euros themselves, with the rest provided by unspecified partners including Casino creditors wishing to invest in the company's equity.
"At this stage, this is not a firm offer but a preliminary expression of interest which may not be successful. The group will study this expression of interest and keep the market informed," Casino said.
The proposal comes after Czech entrepreneur Daniel Kretínsky, Casino's second-largest shareholder, offered in April to take control of the group through a 1.1 billion euro capital increase.
Casino, headed and controlled by veteran entrepreneur Jean-Charles Naouri and owner of the Franprix and Monoprix chains, has been struggling for years with high debt, falling revenues and market share losses in an increasingly competitive market.
It had consolidated net debt of 6.4 billion euros at the end of last year and faces 3 billion euros of debt repayments in the next two years, with rating agencies Moody's and Standard & Poor's warning a default is very likely. The holding company through which Naouri controls Casino is also heavily indebted.
Niel is best known for his telecoms group Iliad, while Pigasse is an influential investment banker and Zouari has extensive experience in food retail distribution.
Clement Genelot, retail analyst at Bryan, Garnier & Co, said creditors and the French government would play a key role in deciding which offer may prevail.
"Based on what we know, Kretinsky's proposal seems a better deal for creditors but the French government might fear a complete dismantling of Casino by a foreign billionaire," he told Reuters, noting France's sixth-biggest food retailer by market share employs more than 50,000 people in the country.
"The option of participating in a deal could be appealing and allow to get better recoveries," a bondholder told Reuters. "The main thing for us though is to see Naouri leave. The equity is deep in the water and unless he puts in himself lots of new money, he should be out of the game."
Casino shares were up 18% in early trade, while those of holding company Rallye were up 33%.
($1 = 0.9272 euros)
(Reporting by Chiara Elisei, Laura Lenkiewicz, Sudip Kar-Gupta, Writing by Silvia Aloisi; Editing by Mark Potter)
