What does Daniel Kretinsky have in mind for Casino and Metro? The unruly Czech investor, with a penchant for sectors ‘on their way back’, has set his sights on the European hypermarket sector, but what are his intentions?
From coal to retail
First, Czech multimillionaire Daniel Kretinsky made his fortune with coal and gas – he owns 94% of EPH, the largest energy group in Central Europe – and then threw himself into print media. Today, the 44-year-old Czech is co-owner of media conglomerate Czech News Center and, since 2018, he also has a stake in the French newspaper Le Monde.
Now it is the next sector’s turn: department stores and hypermarkets. The trend is clear: branches that are past their glory days and seem to be in a downward spiral are what Kretinsky prefers.
Generous benefactor or cunning strategist?
It should, therefore, come as no surprise that Kretinsky stepped into Casino in September last year, just when Rallye, the parent holding company above the French distribution group, had applied for creditor protection. Precisely now that Casino itself had to announce a profit warning, along with disappointing quarterly results, the investor also increased his participation from 4.63% to 5.63%. The Czech – as he is effectively called by Le Monde – is the second largest shareholder of the supermarket group.
In a press statement, Kretinsky expresses his full confidence in the management of Casino and the company’s long-term strategy. He even calls Casino the best-positioned retail group on the French market and “a European leader that is well placed to respond to profound transformations within the sector”.
Is the billionaire really a generous benefactor or is there more to it? Analysts have been speculating about Casino’s sale for some time, a theory that, according to investment advisors Bryan, Garnier & Co, is further reinforced by the Czech investment. However, Casino is not a beautiful bride yet: according to the investment bank, the retailer will only be eligible for a takeover from 2022 onwards, as there will be difficulties with parent company Rallye in the short term.
Collaboration between Casino and Metro?
Another route is consolidation: Daniel Kretinsky and his business partner Patrik Tkac have already (despite many objections) become the largest shareholder in the German wholesale group Metro, where the duo now has a share of 29.99%. The final objective is to acquire the Metro group in its entirety, but the earlier offer of 5.8 million euros for all shares was rejected. Furthermore, the former lawyer owns 40% of Mall Group, a major e-commerce player in Central and Eastern Europe.
At Casino, the Czech businessman now wants to install his own man on the board of directors and at Metro he interfered in the sale of subsidiary chain Real, among other things. Therefore, it is certainly plausible that Kretinsky somehow has a cooperation in mind between the Germans and the French, but under which form (merger, purchasing organisation, …) is not clear.
It is probably no coincidence that the two shareholdings are also held in different holding companies: the stake in Metro falls under the investment vehicle EP Global Commerce, while Kretinsky is in Casino with his company Vesa Equity Investment. This story will undoubtedly be continued…
