PARIS (Reuters) - Two offers will be submitted soon to buy DIA France, a loss-making division of Spain-based discount supermarkets operator DIA which it has put up for sale, a French trade ministry source said on Tuesday.
The source, who did not identify the potential buyers, was speaking after Le Figaro newspaper said French retailers Carrefour and Casino made non-binding offers last week and have until the end of next week to make firm bids.
"According to our information, two offers will be submitted," the source said, adding that the ministry was eager to ensure DIA France was taken over in its entirety.
In France, where DIA made a net loss of 18 million euros ($25 million) last year, unions have voiced concern it might close its least profitable stores, around 200 of them, putting 1,500 jobs at risk.
Spanish bank Sabadell last month valued DIA France, which employs 7,500 people and has over 800 French stores, at around 500 million euros including debt.
Le Figaro said on Tuesday that DIA hoped to get 400 million euros ($544 million) for the sale, which Citi analysts said in a note would value the French business at 0.20-0.25 times sales and was "better" than the 250 million they assumed in their valuation.
Carrefour and DIA declined to comment on Le Figaro report, while Casino had no immediate comment.
A source close to the matter said Carrefour, which previously owned DIA but spun it off in 2011 when the company was listed on the Spanish stock exchange, was looking at DIA's assets.
Casino's chief executive Jean-Charles Naouri said last month the company could look at DIA's French business if it came up for sale.
A purchase would allow the French chains to add stores to their networks but could raise competition issues as DIA has a stronger presence in the Paris area and in southeastern France.
Analysts said they did not see the rationale for Carrefour, which does not operate hard-discount stores, to expand into a format which has been struggling in France.
"We think DIA France is probably a better fit for Casino - the company already operates Leader Price, a hard discount format, and DIA, especially in the Paris area, could potentially offer some synergies and strengthen its presence," Citi analysts said in a note.
Bernstein analysts said in a note that as the DIA business and the hard-discount sector was struggling in France, the purchase would make sense if the buyer "can make substantial changes to the format".
DIA, the world's third-largest hard-discount group after German retailers Aldi and Lidl, has done well in its home market but faced tough going in France, where hard-discounters compete with hypermarkets who have been sharply cutting prices to lure shoppers in difficult economic times.
In France, the market share of discounters has slipped to 12.2 percent in 2013 from a 2009 peak of 14.9 percent, according to Kantar WorldPanel data. DIA's French market share was 1.6 percent last year.
Le Figaro also said that an alternative plan for the French authorities keen to avoid store closures and preserve jobs could be to divide up the DIA stores among all French retailers, including unlisted Auchan, Leclerc, Systeme U and Intermarche.
"It's indeed a method used in some industrial deals, so it's not entirely ruled out. But for now this scenario is not under consideration," the source said.
Additional reporting by Carlos Ruano in Madrid; Editing by David Holmes and Greg Mahlich