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Monday, November 15, 2010

CASINO TO BUY CARREFOUR'S ASSETS FOR $1.2 bln


* Casino's Big C to challenge Tesco for Thailand No.1 spot
* Enterprise value of deal 868 million euros
* Deal will boost Big C's earnings in 2011
* Casino to sell 700 million euros of non-core assets in 2011
* Casino and Carrefour shares ease in line with sector
(Adds analyst comment, more detail, background, shares)
By Dominique Vidalon
PARIS, Nov 15 (Reuters) - France's Casino is buying the Thai stores of rival Carrefour for 868 million euros ($1.2 billion), including debt, to step up the challenge to Britain's Tesco in the fast-growing southeast Asian country.
Casino said on Monday the deal for 42 stores would help Big C Supercenter, in which it owns a 63 percent stake, to become co-market leader in Thailand, with an estimated turnover for 2010 of about 2.4 billion euros.
Bernstein analyst Chris Hogbin said the price, at about 1.2 times net sales, appeared a little high, although that would depend on the value of the real estate assets being acquired.
He also said it suggested Tesco's international businesses were not being valued highly enough by analysts.
"I think it looks an OK deal for Casino," he said.
"Tesco have shown good capital discipline by walking away," he added, after sources close to the matter said the British group had also been in the bidding for the stores.
Carrefour, the world's second-biggest retailer after U.S. group Wal-Mart, has been looking to sell its shops in Malaysia, Singapore and Thailand to focus on markets where it holds leading positions.
Casino is also in the midst of selling 1 billion euros of non-core assets in order to reduce its debts.
The group said on Monday it aimed to sell a further 700 million euros of assets next year.
"The transaction allows Casino to strengthen significantly its market position in one of its key countries," Casino chief exectuive Jean-Charles Naouri said.
The deal will boost Big C's earnings in 2011, Casino said, adding it expected to realise significant synergies by 2013 and the transaction should close at the beginning of next year.
At 0830 GMT, Casino shares were down 0.5 percent at 86.26 euros, while Carrefour was down 0.6 percent at 37.36 euros and Tesco down 0.4 percent at 417 pence, all broadly in line with a lower STOXX 600 European retail index.
A source with knowledge of the matter said a deal to sell Carrefour's assets in Malaysia and Singapore would take another two or three weeks.
Bidders for these assets include Singapore's Dairy Farm, which is backed by Jardine Mathseon Holdings Ltd, Tesco, Japan's Aeon and Malaysian private equity fund Navis Capital, sources close to the matter have said. ($1=.7312 Euro) (Additional reporting by Mark Potter in London and Saeed Hasan in Singapore; Editing by Jon Loades-Carter and Hans Peters)

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