Casino shares fell as much as 40% today after the cash-strapped retailer said the injection of new capital that would result from two rival offers to rescue the group meant existing shareholders would be wiped out.
Czech billionaire Daniel Kretinsky was leading a €1.35 billion investment plan to rescue Casino, dwarfing a rival proposal backed by telecoms maverick Xavier Niel, details of the two offers released after the market close yesterday showed.
"In any event, the current shareholders of Casino will be massively diluted and Rallye will no longer control Casino," the statement said.
Under the offer by Kretinsky and billionaire Marc Ladreit de Lacharriere, existing shareholders would keep 0.20% of the company's share capital. This is excluding Kretinsky and Fimalac, who are already investors in Casino.
Existing shareholders would retain 0.03% of Casino's share capital under the offer from the 3F holding, led by investment banker Matthieu Pigasse and businessman Moez-Alexandre Zouari.
Casino will present the two rival bids to representatives of its debt holders today at a meeting hosted by France's finance ministry and attended by the would-be new equity providers.
The proposed cash injection is the first step of Casino's wide-ranging restructuring plan, which it has said will require a deal with debt holders within a court-led process overseen by the French finance ministry.
The plan needs to be ironed out by the end of July.
A debt restructuring became unavoidable as the sixth-largest French retailer continues to burn cash and faces €3 billion of debt maturing in 2024 and 2025.
Casino is paying the consequences of years of debt-fuelled deals that, following recent losses in market share and revenue declines, have put it on the verge of bankruptcy.
Meanwhile, a derivatives committee which rules on whether credit default swaps - protection investors buy to insure against the default of a borrower - pay out has accepted two new questions from investors on whether bankruptcy and failure to pay credit events have occurred at Casino.
Those requests could trigger payouts if the committee rules in their favour.
