Report: Carrefour is exploring ways to enhance its company valuation, with ADR rising over 9.5% at one point
France's large supermarket chain Carrefour is considering various options to enhance its company valuation, including asset divestitures, partnerships and acquisitions, as well as operational restructuring. This is another move following the company's attempt to sell itself to a competitor three years ago, which ended in failed negotiations. According to insiders, Carrefour may consider selling the entire company or selling a portion of its shares if a suitable buyer emerges, but no contact has been made with any bidders at this time
On Monday, November 4th, Eastern Time, Bloomberg cited sources familiar with the matter stating that French supermarket giant Carrefour is exploring various ways to increase its valuation, a move that comes more than three years after the company last attempted to sell itself to industry competitors but failed in negotiations.
According to insiders, Carrefour is discussing various plans internally and seeking advice from consultants. The options currently being considered include asset divestitures, expansion through partnerships and acquisitions, or restructuring operations.
Currently, Carrefour is contemplating potential future directions. If a suitable buyer emerges, Carrefour may consider selling the entire company or selling a portion of its shares. Another possibility is that the company may choose to remain independent and take measures to enhance its competitiveness. However, these discussions are still in the early stages, and no conclusions have been reached.
On Monday, Carrefour ADR rose more than 9.5% at one point, and European stock prices closed up 0.78%, but are down about 30% from their peak in 2022.
If Carrefour indeed decides to sell, it may attract interest from some private equity firms and other companies within the industry. However, these discussions are still in the early stages, and Carrefour has not yet engaged in formal negotiations with any bidders, and it may ultimately decide not to pursue any transactions.
Carrefour's main markets include France, Brazil, and Spain, with its subsidiary in Brazil having a market value of approximately $2.9 billion in São Paulo. Previously, Circle K's parent company Alimentation Couche-Tard considered acquiring Carrefour for $20 billion, but the plan ultimately fell through due to opposition from the French government. Additionally, French competitor Auchan has also considered buying Carrefour multiple times but has not succeeded.
Any significant transaction involving Carrefour would require the support of some billionaire shareholders, including the Moulin family, which owns the French department store group Galeries Lafayette, and the holding company established by the late Brazilian businessman Abilio Diniz, which holds a significant stake in Carrefour.
Since taking office in 2017, Carrefour CEO Alexandre Bompard has been regarded as a leader skilled in transactions. He oversaw the acquisition of Darty while serving as CEO of retailer Fnac. Currently, Carrefour faces intense competition in France from discount retailers such as Aldi and Lidl, putting significant pressure on the company as consumers are looking to save money.
CEO Bompard stated last month that consumers in their largest market, France, are beginning to prefer organic foods, which may be a good sign indicating that inflationary pressures are easing. However, Carrefour's latest financial report shows that the company's recovery is slower than expected