Casino & Rallye Memo 011220
- Understand remaining asset sale potential – Casino’s French hypermarkets and supermarkets; Cdiscount / Cnova; GreenYellow; RelevanC; GPA / Assai spin-off
- Understand how Casino has sufficient asset sale potential and FCF generation in France to both deleverage and make meaningful restricted payments to support Rallye’s safeguard liabilities repayments and broader shareholder returns
- Understand scenarios for Rallye’s SUNs depending on the degree of asset monetisation at Casino (and extent to which Rallye can free up Casino shares currently pledged to its secured debt due for repayment in FY 23), including buy-out of Casino minorities to minimise leakage on future dividends, discounted tender / exchange offers, liquidation at future times and refinancing by Vesa
- Understand Casino’s debt documentation – asset sale and restricted payments covenants as key for Rallye; comparison of economic position of Casino’s senior secured TLB vs RCF vs SSNs
- Detailed modelling of interaction between Casino and Rallye based on asset sale and restricted payments capacity modelling
- DCF and comparables multiples valuations for GPA, Cdiscount, GreenYellow and RelevanC
- Financial projections, valuations and sensitivities for Casino France, GPA and Cnova
- Machine learning geographic competitor overlap at individual store level for Casino’s French hypermarkets and supermarkets to identify potentially saleable stores that would be attractive to Leclerc, Intermarche or Lidl
- Machine learning mapping of all major French food retailers store locations in Paris to assess: market share of stores / space in Paris; number of stores within given distances of Paris metro stations (as measure of potential footfall and resilience to potential online disruption)
- Reconciliation of Casino France solo entity financials vs those disclosed by Casino
- What valuations has Casino achieved in the past on its hypermarket and supermarket sales, with and without ownership of the store property, and how many more stores could be sold without materially weighing on pro forma EBITDA?
- To what extent should Cdiscount’s customer receivables sales costs (CB4X Payment Agreement) impact Cnova valuation?
- Would Amazon buy Casino, what is Amazon’s plan in food e-commerce and what can we learn from Amazon’s acquisition of Whole Foods?
- How much could the planned spin-off of Assai add to the value of Casino’s GPA stake?
- How does risk-return compare between Rallye SUNs and long expiry Casino out-of-the-money equity call options?
- How does Cdiscount compare vs other third party marketplace platforms and direct sales online pure-play retailers?
- View, Variant Perception & Recommendations
- Potential Asset Disposals – France & Latam
- SSNs / TLB / RCF – Asset Sale & Restricted Payments Covenants. Review Of Debt Documentation
- Can Asset Disposals, Subject To Restricted Payments Language, Both Deleverage Casino & Allow For Rallye To Adhere To Its Safeguard Liabilities Repayment Plan?
- Casino France – Projections, Valuation, Sensitivities
- GPA – Projections, Valuation, Sensitivities
- Cnova / Cdiscount – Projections, Valuation, Sensitivities
- Casino Solo Entity & Consolidated Financials Compared
- Historic Financials – Casino France, GPA, Cnova