Casino - comment

Czech billionaire Daniel Kretinsky, via his Vesa vehicle, purchased additional shares to take his holding to just above 10% (7.4% of voting shares). This follows his purchase in November, which brought his holding above the 5% threshold in voting share (6.8% of the total outstanding shares). We haven’t confirmed the dates of the purchases but likely in the last couple of weeks when Casino’s share price has been hitting new lows.

The purchase needs to be put into context, in November 2020, Vesa owned 10.16% of the outstanding shares, a position built up over the previous 6 months. During the first half of 2021, Vesa was selling down its stake.

When Vesa reached 10% last year, they declared they were not working in consort with anyone, was financed by equity and credit facility and that Vesa was supportive of the disposal strategy undertaken by Casino. That declaration has expired but we believe it is still applicable, and therefore we are not reading too much into the filing. It is likely to provide some support to the share price but does further reduce the free float in Casino shares potentially leaving them more volatile.

We were surprised that Kretinsky purchased more shares since the Ukrainian crisis, given a majority of his wealth is derived from the EP Infrastructure, the 49% shareholder in Eustream, the company that operates the gas-transmission system piping Russian gas to central and eastern Europe. Rating agency Fitch placed EP Infrastructure on its “Rating Watch Negative” due to its large stake in the Slovakian gas pipeline. Fitch said Gazprom accounted for two-thirds of Eustream’s transported volumes.