French owner of Big C has too much debt & will sell Thai & Vietnam companies to deal with problem. Big C share prices shoot up 14%.
Central Group eyes Casino’s units in Thailand, Vietnam
Thailand’s largest retail conglomerate Central Group is keen to bid for Casino Group’s Thai and Vietnam operations, a company executive said.
Casino owns 58.6% of Big C Supercenter Plc, which has a total a market value of $5.5 billion.
Casino said last week it was keen to sell this stake after announcing it would sell its Vietnam unit in the first quarter.
“We are interested in both Big C in Thailand and Vietnam,” Prin Chirathivat, deputychief executive officer told Reuters.
“If the prices are not too expensive, we will be keen to bid,” Mr Prin said adding his family, the Chirathivats, has a combined 25% stake in Big C.
Central has been actively looking to buy assets overseas as it wants to expand into Southeast Asia and Europe.
Source: Reuters News agency here
RETAIL & FOERIGN INVESTMENT
Big C shares surge after parent Casino says to sell stake
The French parent company of hypermarket operator Big C Supercenter in Thailand, the Casino Group, announced on Friday that it would sell its majority stake in Big Cworth $2.6 billion.
Big C shares surged over 14% to a more than eight-month high after theannouncement.
Big C is Thailand’s second-largest hypermarket operator after Tesco’s Thai unit, and has a market capitalisation of 163.25 billion baht.
WHO ARE THE BUYERS?
Casino, which owns 58.6% of Big C, said buyers had already expressed interest in the Thai group.
“The group is taking steps towards the sale of this asset,” Casino said in a statement.
The expressions of interest came as Casino went through the process of selling its Vietnam unit, Casino said.
Central Group and companies linked to tycoon Charoen Sirivadhanabhakdi have shown interest in expanding into Vietnam and may be among the potential buyers for that unit.
The Thai Big C business may also be attractive to them.
Neither company’s spokespeople were able to give immediate comment on Friday.
Bankers familiar with Thailand expect other Thai business groups will also be in the mix.
FRENCH RETAILER DANGEROUSLY LEVERAGED
The unexpected move to sell the Thai unit came after a report by short-seller Muddy Waters in December that said the French retailer was “dangerously leveraged”,prompting the worst slide in Casino’s stock in seven years.
“This announcement comes as a surprise and may illustrate the degree of distress of the company,” Barclays analysts said in a research note on Thursday.
Casino aims to sell its Vietnam unit in the first half of 2016 as part of a €2-billion plan to reduce debt.
BIG C PROFITABLE & VALUABLE
The research note said Big C was a valuable and profitable asset with an estimatedEbitda (earnings before interest, taxes, depreciation and amortisation) margin of 6.7% for financial year 2016, against Casino’s 3.4%.
Casino’s Big C unit in late 2010 bought Carrefour SA’s Thai assets in a deal then valued at $1.2 billion.