Casino - updated pricing and management discussion on CNova and GreenYellow asset sales

All,

Please find our unchanged Casino analysis here and for CNova here.

Pricing:  Casino bankers have indicated to the market a tighter spread (4-4.25% from 4.5-4.75%) with reduced OID discount, for the revised Term Loan B but has kept the size of the deal at €400m the same.  We had expected Casino to upsize the bond deal currently been marketed and reduce the secured portion.  Noise in relation to the Bond deal is also favourable. 

Non-core Assets: 

CNova: On the call yesterday, management acknowledged that GPA don’t see Cnova stake as core, and are likely to try placing the stake in the near future.  Casino are likely to remain a majority holder of Cnova, via Casino direct holding, therefore we should expect a placing of the 35% stake of GPA and up to 15% stake directly held in the medium term.  Proceeds from the up to 15% stake from Casino would be used for deleveraging, but the GPA stake would require a special dividend to funnel the money to Casino.  

GreenYellow: The timeframe for realising part or all of the value in GreenYellow is likely to be medium-term also, GreenYellow have approval to now incur non-recourse debt at entity level, to further fuel the growth.  When comparing GreenYellow to listed peers, it is apparent that the different levels of growth experienced at the listed entities from greater access to capital markets.  To justify similar valuation multiples, GreenYellow will have to increase its growth CAPEX.

Tomás

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