French retailer Casino Group announced that it has signed an agreement with funds managed by affiliates of U.S. asset management firm Apollo Global Management to sell a portfolio of 12 Géant Casino hypermarkets and 20 Monoprix and Casino supermarkets properties.
Located primarily outside Paris, these 32 properties represent €26.6 million in annual rent, including €14.2 million from hypermarket assets and €12.4 million from Monoprix and supermarket assets and offer an estimated yield of 5.3% including transfer costs.
Nearly 80% of the value of the assets after deduction of registration fees, 374 million euros, are to be paid to the Casino Group at the closing of the proposed transaction which is expected to occur by the end of July 2019. The proposed transaction is subject to the provision of financing, the terms of which have been agreed in principle.
The Apollo Funds will create a special purpose vehicle to acquire the portfolio in order to enhance its value and sell it on the market under the best possible conditions. The Casino Group will receive an interest in this new entity, enabling it to benefit from the value created by the transaction.
Depending on the entity’s performance, the Casino Group could receive up to an additional €110 million in the next few years.
This operation is part of the additional €1 billion of non-core asset disposals to be completed by Q1 2020 (bringing the total non-core asset disposal plan to €2.5 billion) and more generally as part of the financial perspectives announced by the Group on 14 March 2019.
It does not change the annual growth target for France’s trading profit (+10%), driven by the rapid execution of the actions carried out since 2018 (closures and disposals of lossmaking stores, Horizon purchasing alliance, cost savings plan, new sources of revenues, development of buoyant categories)
Source: Casino Group