PARIS (Reuters) – Casino announced on Wednesday that it had received a preliminary letter of intent from the trio of businessmen made up of Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari on a proposal to strengthen its equity up to a amount of 1.1 billion euros.

A source familiar with the matter had told Reuters the day before that the businessmen had submitted an offer of one billion euros to take a stake in the Saint-Etienne distributor.

“At this stage, this is not a firm offer but a preliminary expression of interest which may not be successful,” Casino said in a statement.

“This proposal would be accompanied, to the extent necessary, by an adaptation of Casino’s existing debt to its capacities and the preservation of its growth potential”, adds the group.

On the Paris Stock Exchange, Casino shares soared in early trading by 18.6% to 7.87 euros.

Following the abandonment of a merger project between Teract and Casino, Xavier Niel, Matthieu Pigasse and Moez-Alexandre Zouari said last week that they were working on a “lasting financial and industrial solution” for the distribution group.

As part of their proposal, they plan to directly inject 200 to 300 million euros themselves, the balance being subscribed by partners who would join their project, it is specified in the Casino press release.

The proposal of the trio of businessmen aligns with that of Daniel Kretinsky who proposed at the end of April to take control of the group via a capital increase of 1.1 billion euros.

Heavily indebted and under pressure from rating agencies, Casino began official negotiations with its creditors at the end of May in order to resolve its financial difficulties.

(Written by Nicolas Delame and Blandine Hénault, edited by Kate Entringer)

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