Feb 28, 2012
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Casino digs in against Galeries Lafayette

Feb 28, 2012

PARIS - French retailer Casino on Monday stuck to its guns in its increasingly protracted wrangle with Galeries Lafayette, ruling out any sale of its share of their Monoprix joint venture and saying it would only buy out its partner at a "fair" price.

Describing its 50 percent stake in food-and-fashion chain Monoprix as a strategic asset, Casino said the joint venture had profited from its support and access to its purchasing platform.

"(Casino's) board reiterates that Monoprix is a strategic asset and it has no intention of selling it," Casino said.

Casino and Galeries Lafayette, operator of the eponymous Paris department store, are at loggerheads over who should win control over Monoprix. While Casino does not want to sell, it has also rejected an offer to buy out Galeries Lafayette for 1.35 billion euros ($1.81 billion) as too high.

A 1.35 billion-euro price tag implies a multiple of 9.1 times earnings before interest, tax, depreciation and amortization, while Casino and Marks & Spencer are trading at 6.4 and 5.3 respectively, Casino said.

However, Casino said it would buy the stake for what it considered to be a "fair price," as per the terms of their shareholder agreement and a sale option held by Lafayette.

Last week Casino said it had made a counter offer of 700 million euros for the stake. Even with three advisory banks involved and a fourth potentially in the cards, the two parties did not reach agreement and Lafayette filed a complaint with the Paris Commercial Court, according to Casino.

Galeries Lafayette's chief executive subsequently told French daily Le Figaro on Saturday that his group had in fact offered to buy Casino's stake for 1.35 billion euros and that the offer was up for review on Monday. ($1 = 0.7466 euros) (Reporting by Lionel Laurent; Editing by Christian Plumb and Richard Chang)

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