PARIS (Reuters) - Debt-laden French retailer Casino (CASP.PA) is in talks to sell its French discount store chain Leader Price to German low-cost rival Aldi [ALDIEI.UL], Casino said on Thursday.
The move, which confirms a report by French daily Les Echos, comes as Casino CEO and controlling shareholder Jean-Charles Naouri is hunting for ways to ease the company’s debts - and those of parent company Rallye - in part via asset sales.
Casino said in a statement that following an expression of interest from Aldi France, the two groups had “entered into discussions with a view to have Aldi France submit a binding offer,”
Les Echos said earlier that Casino was poised to sell Leader Price, which had 2018 sales of 2.5 billion euros ($2.8 billion), to Aldi in a deal estimated to be worth 400 million euros.
A sale of Leader Price was expected by analysts after Casino said last month it was targeting the sale of 2 billion euros worth of assets in addition to the 2.5 billion initially sought to reduce its debt burden.
The retailer has mandated BNP Paribas to handle a possible deal, Les Echos added.
Shares in Casino closed up 2.29% percent on Thursday, outperforming France's blue-chip CAC 40 index .FCHI.
Casino has been struggling in France, where a price war among supermarkets has dented retailers’ profit margins.
Its parent company Rallye (GENC.PA) was placed under protection from creditors in May.
Earlier this month, Czech businessman Daniel Kretinsky and Slovak partner Patrik Tkac bought a 4.63% stake in Casino in a show of support for Naouri.
Reporting by Dominique Vidalon; Writing by Benoit Van Overstraeten; Editing by Richard Lough and Mark Potter