According to a direct but anonymous source, Deutsche Bank AG, Royal Bank of Scotland Group Plc, and HSBC Holdings Plc have loaned Casino Guichard-Perrachon SA a $1 billion one-year bridge loan to pay for a Thai acquisition. The supermarket chain based in France will use the money to aid in the finance of an €868 million (equivalent to $1.18 billion) purchase of Thailand business Carrefour SA.
A unit of Saint-Etienne-based Casino, Big C Supercenter PCL, agreed to purchase 42 store locations in Thailand from Carrefour. These stores will be added to the already 111 stores already under the ownership of Casino’s Big C brand. This will allow Casino to have improved purchasing power and provide a more streamlined distribution line in the Bangkok area, doubling Big C’s presence in Bangkok.
Media spokesman for Casino, Frederic Croccel, was not available for comment.
The €8689 million that will be paid by Casino for Carrefour’s Thai assets has garnered disapproval by analysts including Bualuang Securities Pcl’s Chaiyatorn Sricharoen. He made comments that the company is paying too much and would better generate a return on the money somewhere else.
According to Bloomberg data, Casino beat out Tesco Plc for the supermarket purchase and has $9.2 billion in loans and bonds maturing before the end of the year 2049. For Carrefour, the transaction is part of a strategic plan to sell its Thai, Malaysian, and Singapore businesses, so that they can focus on their interests in Indonesia and China.
According to CMA data provider, Casino’s debt rose 3 basis points over the last week to 115 basis points, and its stock traded up 0.1% at €68.04, up 9% this year.
Big C Supercenter, Thailand’s 2nd largest hypermarket operator, shares fell the most since October 2008, dropping 10% to 70.25 baht only to jump 13% earlier that day.