An inscrutable investor nicknamed the “Czech sphinx” is poised for a showdown with a French spy-turned-tech billionaire in a battle for the control of one of the country’s biggest supermarkets.
Daniel Kretinsky is to take on Xavier Niel in a fight for the debt-laden grocery empire Casino.
Mr Kretinsky – who is Sainsbury’s second-biggest investor – has tabled a €1.8bn (£1.5bn) takeover bid for the business.
Meanwhile Mr Niel, the tech entrepreneur behind Free Mobile, has joined forces with banker Matthieu Pigasse and retail entrepreneur Moez-Alexandre Zouari to make a rival offer.
The competition threatens to drive a wedge between the two tycoons, who jointly own the French newspaper Le Monde.
Mr Kretinsky’s Noveau Monde and Mr Niel’s NJJ Presse each own 26.7pc of the newspaper’s shares.
Mr Niel, a convicted tax evader, has claimed he spied on former president François Mitterrand and the car giant Renault in the 1980s for France’s security agency.
Meanwhile, Mr Kretinsky has emerged from comparative obscurity to become one of Europe’s most prolific investors after making his initial money in the Czech Republic by acquiring power plants following the fall of the iron curtain.
Mr Kretinsky now has a 10pc stake in Sainsbury’s and a 26pc shareholding in Royal Mail, making him the FTSE 100 company’s biggest investor.
The Czech investor’s business is offering €1.35bn in cash alongside a group of debtholders that will convert loans into equity in a deal worth €1.8bn, according to reports. A spokesman for Mr Kretinsky declined to comment.
The consortium including Mr Niel, meanwhile, is offering €900m of equity but has the support of secured creditors owed €1.5bn, the group said in a statement. It also benefits from Mr Zouari already running many of Casino’s franchised stores.
Shares in Casino, France’s sixth largest food retailer, have fallen sharply in the past few weeks after bosses were forced to concede that investors would be “massively” diluted under a plan to cut debts, sharply reducing the value of their stakes.
Casino is currently controlled by Jean-Charles Naouri, an Algerian-born tycoon whose investment company Rallye has been in control of Casino since the early 1990s.
However, the businessman is now likely to be forced off Casino’s board as about €5bn of the company’s debt is converted into share capital.
Suitors for the business have been told that at least €900m of new equity will also need to be injected. The Casino board is considering the bid proposals and will announce next steps on Wednesday evening.
Mr Kretinsky failed in an attempt to seize control of German wholesale retailer Metro in 2019, when his bid was rejected by the board because it would laden the business with too much debt. He remains a 40pc shareholder in Metro, however.
Mr Niel, meanwhile, admitted in 2020 that he had hacked into the data of mobile phones in France, including that of President Mitterrand.
He said that he was “not in the secret services”, instead labelling himself a “sort of honorary agent”.
Mr Niel made his fortune by cracking open France’s closed telecoms network. Iliad, the group he founded, owns the Free brand and is valued at about €11bn on the Paris Stock Exchange.
Prior to his telecoms exploits, Mr Niel offered online adult services on internet precursor Minitel. In 2004 he was fined €250,000 and given a two-year suspended prison sentence for tax evasion. He was also arrested for profiting from prostitution, but found not guilty.
Mr Niel’s partner is Delphine Arnault, the chairman and chief executive of luxury brand Dior, and daughter of Bernard Arnault, the founder of LVMH and one of the world’s richest people.
Although it has shouldered large debts for some time, the parlous state of Casino’s finances has only come under microscope comparatively recently.
In late 2015, the supermarket was deemed “investment grade” by credit rating agencies – a sign that debt levels were manageable for the size of the company.
But since 2018, Mr Naouri has been selling down assets to reduce an unwieldy debt pile – all while other companies he owned through Rallye were placed into creditor protection.
Meanwhile, hedge funds have bet against Casino’s fortunes, placing further downward pressure on the company’s share price.
The battle of the billionaires for Casino may yet be gatecrashed by others, however.
The Mulliez family, which owns the rival grocer Auchan, Decathlon, and DIY chain Leroy Merlin is said to have approached Mr Kretinsky about muscling in on his bid.
And Carrefour, France’s second-biggest chain behind E.Leclerc, has analysed the value of stores run by Casino subsidiary Monoprix, Le Monde reported.
Casino generated €33.6bn in sales last year. It employs 50,000 people in France and 200,000 globally with operations also in Latin America.
Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month, then enjoy 1 year for just $9 with our US-exclusive offer.
Source: https://finance.yahoo.com/news/europe-richest-billionaires-battle-over-050000926.html