The Board of Directors of Mercialys, a 50.1% subsidiary of Casino group
(Paris:CO), has adopted today a new step of its development strategy.
Through its new vision of « Foncière Commerçante », Mercialys aims at
extending its range of services and hence reinforcing the attractiveness
of its shopping malls, a strategy supported by an acceleration of the
"Alcudia" program (renovation and extension of the existing sites), and
a more than doubled asset rotation plan, which should reach ?500m by the
end of 2012.
In the context of this new step of its REIT (Real Estate Investment
Trust) life, Mercialys plans to:
submit to the approvals of its shareholders two consecutive
distributions totaling c.?1.25Bn in 2012 (?1.15Bn through a
contribution premium distribution). It is planned to distribute ?1Bn
in the first semester. A second distribution, of up to ?250m, should
take place during the second semester, following a second general
meeting, subject to the completion of the disposal program, requiring
the approval of its new Board of Directors.
amend as a consequence its financial structure through the issuance of
?1Bn of debt, enabling the company to target a conservative and
sustainable Loan-to-Value below 40%.
The full completion of these distributions would enable Casino to fully
recover its historical investments in the company.
Casino will reduce its stake to reach a level between 30% to 40% of the
share capital of Mercialys (compared with a majority stake today), and
remain a key partner of Mercialys. The composition of Mercialys' Board
of Directors will be modified accordingly.
The two companies intend to renew their partnership and Mercialys will
thus continue to contribute to the development of the value-creating
retail & real-estate dual model of Casino.
Casino pursues the implementation of its value-creating dual model
and will renew its partnership with Mercialys
Casino group pursues and strengthens its dual model of active and
coordinated management of its retail & real estate activities, which
remains a key pillar of the group's strategy in France and abroad.
The key principle of the partnership, according to which Casino develops
and manages a pipeline of projects that Mercialys purchases to feed its
growth, should be maintained with the same financial conditions. Its
practical dispositions will be adapted in a new agreement extended until
end 2015 and submitted to the approval of the Board of Directors of
Casino and of Mercialys in its new composition.
Mercialys will remain a key partner for Casino's projects. Its new
differentiating vision of « Foncière Commerçante » will enable the
continuation and acceleration of value creation at the historical retail
sites of Casino, including the area optimisation between hypermarkets
and shopping malls, strengthening the offer surrounding the Géant stores.
For example, it is planned that Mercialys could support, through the
Alcudia program, the development of most of the 37 extension projects
planned by Casino over the next three years (2012-2014), particularly in
some of the group's flagship centres.
Casino significantly strengthens its financial flexibility
As a result of the transaction, including the reduction of the group's
stake in Mercialys, Casino should receive a gross cash inflow of
?800-900m, significantly strengthening its financial flexibility with a
neutral impact of the whole transaction on its underlying net profit 20121.
As of today it has not been planned that this operation should lead the
Group to modify its dividend policy.
Mercialys will be accounted for by Casino under the equity method at the
date of the change of control.
The extraordinary return to Mercialys' shareholders would enable Casino
to fully recover its investments in Mercialys, generating an excellent
return on investment.
Jean-Charles Naouri, Chairman and Chief Executive Officer of Casino
«This new strategic step of Mercialys' development relies upon new
value-creating drivers while rewarding its committed shareholders; it
will enable the company to pursue its path of strong growth and
profitability engaged since its IPO.
Casino will remain a key shareholder and partner of Mercialys. The
group will benefit on its sites from Mercialys' expertise, reinforced by
the new Concept of "Foncière Commerçante". »
Conference call on the transaction
Antoine Giscard d'Estaing, the group's CFO, will hold a conference call
at 18.30 (CET) in English. Details and content will be sent by email.
The Casino Group is one of the leading food retailers in the world.
In addition to its 9,500 outlets in France, the group has another 2,200
stores, mainly in Latin America (Brazil and Colombia) and South East
Asia (Thailand and Vietnam), which account for 45% of its sales. In
2011, Casino had consolidated sales of ?34.4 billion. It employs 230,000
people around the world.
Mercialys, one of France's leading real estate companies, is solely
active in commercial property. Rental revenue in 2011 came to Euro 161
million and net income, Group share, to Euro 147 million. It owns 120
properties with an estimated value of Euro 2.6 billion (including
transfer taxes) at December 31, 2011. Mercialys has benefited from
"SIIC" tax status (REIT) since November 1, 2005.
This press release contains forward-looking statements about future
events, trends, projects or targets.
These forward-looking statements are subject to identified and
unidentified risks and uncertainties that could cause actual results to
differ materially from the results anticipated in the forward-looking
statements. Please refer to the Casino "document de reference" for the
year to December 31, 2010 available on its website (www.groupe-casino.com)
for more details regarding material risk factors and uncertainties that
could affect Casino business.
This press release has been prepared for informational purposes only
and should not be construed as a solicitation or an offer to buy or sell
securities or related financial instruments. It does not and should not
be treated as giving investment advice nor be regarded by recipients as
a substitute for the exercise of their own judgments. No representation
or warranty, express or implied, is provided in relation to the accuracy
or completeness of the information contained in this document.
1 Underlying net profit corresponds to the net profit from
continuing operations, adjusted for the net impact of other operating
income and expense, non-recurring financial items and non-recurring
income tax expense/benefits (see 2010 Registration Document: §2.1.4 of
the Management Report).
Investors and Analysts contacts:
33 1 53 65 64 17
33 1 53 65 64 18