Casino to Buy Out Cnova After Shares Lose Half Their ValueThomas Mulier
French retailer's shares surge on plan to purchase Cnova stake
Cnova has said it no longer complies with Nasdaq listing rules
French retailer Casino Guichard-Perrachon SA will pay as much as $196 million to buy out its Cnova NV online retail business, just a year and a half after listing about 6 percent of the unit in New York.
Casino is offering $5.50 a share and will refocus the unit on the French online market, it said in a statement Thursday. That’s 62 percent higher than Cnova’s closing price Wednesday, though less than the $7 a share Casino sold the shares for in a November 2014 initial public offering. Casino shares rose as much as 8.1 percent in Paris.
Cnova plans to give up its troubled Brazilian business, merging it into Via Varejo SA, another company Casino has a stake in. In December, Cnova started an investigation into employee misconduct related to inventory mismanagement at warehouses in Brazil. The probe identified a potential overstatement of 2015 sales of about 30 million euros ($34.2 million). Cnova said last month it no longer complied with Nasdaq listing rules because it didn’t file an annual report on time.
Casino has been selling assets in Asia and Latin America to cut borrowings amid an attack from shortseller Carson Block. Among Block’s criticisms is that the retailer has a “dangerously” high debt burden, an assertion the company denies. Standard and Poor’s cut Casino’s credit rating to junk in March.