Casino - thoughts on material presented this morning

All,

As previously discussed, the deal remains positive for the short dated bonds, negative for the long dated bonds and broadly positive for the equity as Casino confronts its refinancing risk. However, as we expected, they are only partially tendering for the short dated bonds (2020, 2021 & 2022) and not taking them out in full as some had believed. In fact, the company is committing E500m less to buying back the short dated bonds than we had assumed only yesterday.

The presentation is the first time we have seen explicitly an acknowledgement of discussion with Aldi France for the sale of their Leader Price store portfolio. Leader Price have LTM sales of €2.3bn and is likely to form majority part of the €2bn asset sales announced in August.

Casino has moved the ECommerce business back into the consolidation Group for Casino France, further complicating the historics. This unit has a higher leverage and EV multiples so it is less flattering on the overall Casino France entity, than if they omitted it from that level. However, it is one of the stronger growing segments with good momentum and the banks are likely to have demanded it be part of the “core” Group.

Tomas is your Analyst.

Wolfgang