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UPDATE 1-Monoprix spat moves to court
March 20, 2012 / 1:02 PM / 6 years ago

UPDATE 1-Monoprix spat moves to court

* Casino files legal complaint with Paris court

* Casino wants Lafayette to comply with Monoprix CEO deal

* No immediate comment from Galeries Lafayette, Monoprix (Adds details, background, share price, analyst comment)

By Dominique Vidalon

PARIS, March 20 (Reuters) - The battle for control of Monoprix heated up on Tuesday as Casino said it was taking Galeries Lafayette to court to force it to respect commitments relating to their food and fashion joint venture.

The two disagree over the value of high-margin Monoprix and its network of 500 stores in French city centres, and with strong sites in the Paris area.

Last week, Casino filed a complaint with the Paris Commercial Court against Galeries Lafayette and its three representatives on the board of Monoprix to force them to comply with an agreement allowing Casino to name the chief executive of Monoprix from March 31, Casino said on Tuesday.

Casino said Galeries Lafayette violated their contractual agreement as Monoprix board members voted at a Feb. 22 meeting to extend the mandate of Philippe Houze as chairman and CEO for one year.

The three Monoprix board members targeted by the complaint are Houze, Galeries Lafayette owner and supervisory board chairman Ginette Moulin and Philippe Lemoine, head of Galeries Lafayette’s services unit, LASer.

Galeries Lafayette and Monoprix had no immediate comment on Tuesday.

Under a partnership initiated 15 years ago and renegotiated over the years, Casino and Galeries Lafayette each own half of Monoprix.

Casino has an option to take control of Monoprix while Galeries Lafayette has an option to sell.

But the two companes are far apart on valuation and disagree on earnings prospects.


Galeries Lafayette has offered to sell its stake for 1.35 billion euros ($1.79 billion) or buy Casino’s for the same price, but Casino argues its partner’s holding is worth only some 700 million. It values its own holding at about 1 billion in its accounts.

Last month Galeries Lafayette, saying its financial assumptions should be the ones retained by Casino, filed a complaint against Casino.

Casino has said Monoprix, which made 10.5 percent of its French sales and 5.7 percent of its group sales last year, is a strategic asset. Its chief executive, Jean-Charles Naouri, last month described the spat as a “storm in a teacup”.

Despite a challenging economic climate, Monoprix grew sales 3 percent last year and achieved an operating margin of 7.6 percent, above the 4 percent of Casino’s French business.

With two court cases now under way, analysts are bracing themselves for a lengthy battle.

“No transaction should take place before the last quarter of 2012 given the time it will take for the proceedings to be completed,” CM-CIC analysts said in a recent note.

At 1145 GMT, Casino shares were off 0.61 percent at 74.97 euros. The stock has gained 16 percent this year, outperforming the European retail sector, which has gained 3.74 percent. ($1 = 0.7552 euros) (Reporting by Dominique Vidalon; Editing by Dan Lalor)

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