Casino Group to sell Thai Big C stake

The visitor to Thailand need not wait long to find a Big C. Source: Flickr

The French Casino Group has agreed to sell its majority holding in Thailand’s Big C Supercenter for 3.1 billion euros excluding debt (US$3.5 billion) to the Thai TCC Group, it said on Sunday.

The deal is a part of the French food retailer’s debt reduction plan. Casino has announced a €4-billion disposal plan, including the sale of its Vietnam assets and its stake in the Thai ubiquitous supermarket chain.

Casino’s plan to sell the Thai assets came after a December report by a short-seller called Muddy Waters that said the Casino Group was “dangerously leveraged”, prompting its worst stock slide in seven years. The Vietnamese selloff had been planned earlier.

The sale to TCC, controlled by Thai magnate Charoen Sirivadhanabhakdi, will allow Casino to cuts its debt by €3.3 billion and will be completed by March 31, the French retailer announced.

Charoen’s acquisition of Big C would boost his retail presence in Thailand. He owns Berli Jucker, the retail arm of TCC.

The deal would add to the US$50.6 billion of acquisitions in Southeast Asia over the past 12 months, data compiled by Bloomberg show.

The transaction values Big C at 253 baht (US$7.1) per share, it said. This is a 28-per-cent premium to Big C’s share price on January 14, when Casino announced the sale of its stake, and around 11 per cent more than the close on Friday.

There were 580 Big C stores in Thailand at the end of March 2014, ranging from hypermarkets to minimarkets with the contradictory name Big C Mini.

The supermarket deal would make for Thailand’s second-biggest inbound acquisition after 2013’s US$6.6-billion purchase by CP All PCL of cash-and-carry wholesaler Siam Makro.

Market observers will be looking to see if Central Group, which was also bidding for Casino’s stake, would sell its 25-per-cent holding in Big C, which it originally founded in 1993 and then sold a majority stake to Casino in 1999.

Central and TCC were unavailable to comment.

Ratings agency Standard & Poor’s last month put Casino’s debt on “negative watch” for a possible downgrade to junk status, citing concerns over the retailer’s high debt and weakness in its Brazilian market.

The TCC conglomerate acquired control of Singapore food and beverage manufacturer Fraser & Neave in 2013.