Casino Discussing Merger of French Retail Arm With Teract

Casino Guichard-Perrachon SA and Teract SA, a challenger backed by billionaire Xavier Niel, said they are in talks to combine their French retail operations, confirming an earlier Bloomberg News report.

(Bloomberg) — Casino Guichard-Perrachon SA and Teract SA, a challenger backed by billionaire Xavier Niel, said they are in talks to combine their French retail operations, confirming an earlier Bloomberg News report.

Teract shares rose as much as 6.8% Thursday morning, while Casino gained as much as 4%.

Casino said Wednesday it began exploratory discussions with Teract that could lead to a merger of the two companies’ French distribution activities. Casino would control the resulting company.

A separate new entity controlled by Teract shareholders would focus on the supply of agricultural and other products, the company said in a statement Wednesday.

Discussions are at a preliminary stage and there can be no certainty that any transaction will be concluded, Casino said.

Casino has a market capitalization of about €1.27 billion ($1.4 billion), while Teract is valued at €506 million. The companies may eventually seek a public listing for the merged retail entity if they decide to proceed with a transaction, people with knowledge of the matter said earlier.

In June, Casino simplified its corporate structure in France, regrouping all its food retail labels in its home country under a single holding company. It operates brands such as Franprix and Monoprix, two convenience store chains with a strong presence in the Paris region. It’s been selling off assets in the past few years as it seeks to lower its debt pile.

Teract traces its roots to a special purpose acquisition company formed by French retail entrepreneur Moez-Alexandre Zouari along with Niel, who made his money in the telecom sector, and banker Matthieu Pigasse. They merged their blank-check firm with InVivo Retail, owner of the Jardiland garden chain as well as Frais d’Ici food stores. Zouari has been a longtime Casino partner as he operates some Franprix and Monoprix franchises.

Casino said in 2018 it spurned an approach by Carrefour SA for a possible merger, and Chief Executive Officer Jean-Charles Naouri has ever since been resistant to letting go control of the company.

(Updates with shares in second paragraph)

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