October 22, 2018 / 6:13 AM / a year ago

UPDATE 2-Retailer Casino's parent Rallye gets offer for 'Courir' sports arm

* Rallye is parent company of retailer Casino

* Equistone makes offer for Rallye’s ‘Courir’ sports arm

* Offer represents equity value of 283 mln euros

* Shares in Rallye and Casino rise (Adds share price reaction and analyst comment)

By Sudip Kar-Gupta

PARIS, Oct 22 (Reuters) - Rallye, the holding company that controls French supermarket retailer Casino , has received an offer for its ‘Courir’ sports brand, with both companies keen to sell assets and cut debts that have concerned some investors.

Private equity firm Equistone Partners Europe had made a binding offer for Courir for an equity value of 283 million euros ($326 million), and the deal could be completed in the first half of 2019, Rallye said on Monday.

Shares in Rallye rose 3.8 percent, while Casino shares edged up 0.5 percent.

Analysts at brokerage Raymond James said the Courir sale was a positive move, in the broader context of Rallye and Casino’s restructuring, but added there was still work to do.

“Disposal of Courir is positive, but Casino dividend remains central,” it wrote in a note, keeping a “market perform” rating on Rallye shares.

The sale of Courir marks the latest planned asset disposal by Casino and Rallye to ease concerns over their financial position, with Casino shares having fallen some 20 percent so far in 2018 on concerns over debts at both companies.

Worries over those debts have led to hedge funds targeting Casino by betting on its shares falling further in future.

Within the Casino group, dividends from Casino are used to maintain Rallye’s debt interest payments. The shares of Casino that are held by Rallye are also pledged as collateral to banks in order for Rallye to obtain more financing.

Earlier this month, Casino agreed to sell some properties of its Monoprix chain for 565 million euros, while in September five banks granted Rallye a new 500 million euro credit line.

Last week, Casino reported that sales growth had accelerated in the third quarter, and it also kept its annual financial targets.

$1 = 0.8687 euros Reporting by Sudip Kar-Gupta; Additional reporting by Alan Charlish Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise

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