Casino -comment

Following the announcement last week of further equity stake sales in Assai, Casino launched today the sales proceeds for 174m shares in Assai (c.€500m) which may be upsized by up to a further 80m shares (additional €230m). Speculation will circle about where these proceeds will be applied, but our instincts tell us it will be used to repay bank debt/RCF in order for paving the way for the potential Teract merger. Asset sales is deleveraging for Casino France but removes any equity upside and leaves Rallye and beyond further out of the money.

Separately, it was reported in the French press that some of the bank debt traded at 70% of face, highlighting the fact the even the banks are running out of patience with the pace of deleveraging at Casino.