* Carrefour, Casino made non-binding offers last week -
* The retailers have until end of next week to make firm
offers - paper
* Carrefour declines to comment, Casino has no immediate
(Recasts with source; adds details, analysts comments)
By Jean-Baptiste Vey and Dominique Vidalon
PARIS, June 3 Two offers will be submitted soon
to buy DIA France, a loss-making division of Spain-based
discount supermarkets operator DIA which it has put up
for sale, a French trade ministry source said on Tuesday.
The source, who did not identify the potential buyers, was
speaking after Le Figaro newspaper said French retailers
Carrefour and Casino made non-binding offers
last week and have until the end of next week to make firm bids.
"According to our information, two offers will be
submitted," the source said, adding that the ministry was eager
to ensure DIA France was taken over in its entirety.
In France, where DIA made a net loss of 18 million euros
($25 million) last year, unions have voiced concern it might
close its least profitable stores, around 200 of them, putting
1,500 jobs at risk.
Spanish bank Sabadell last month valued DIA France, which
employs 7,500 people and has over 800 French stores, at around
500 million euros including debt.
Le Figaro said on Tuesday that DIA hoped to get 400 million
euros ($544 million) for the sale, which Citi analysts said in a
note would value the French business at 0.20-0.25 times sales
and was "better" than the 250 million they assumed in their
Carrefour and DIA declined to comment on Le Figaro report,
while Casino had no immediate comment.
A source close to the matter said Carrefour, which
previously owned DIA but spun it off in 2011 when the company
was listed on the Spanish stock exchange, was looking at DIA's
Casino's chief executive Jean-Charles Naouri said last month
the company could look at DIA's French business if it came up
A purchase would allow the French chains to add stores to
their networks but could raise competition issues as DIA has a
stronge presence in the Paris area and in southeastern France.
Analysts said they did not see the rationale for Carrefour,
which does not operate hard-discount stores, to expand into a
format which has been struggling in France.
"We think DIA France is probably a better fit for Casino -
the company already operates Leader Price, a hard discount
format, and DIA, especially in the Paris area, could potentially
offer some synergies and strengthen its presence," Citi analysts
said in a note.
Bernstein analysts said in a note that as the DIA business
and the hard-discount sector was struggling in France, the
purchase would make sense if the buyer "can make substantial
changes to the format".
DIA, the world's third-largest hard-discount group after
German retailers Aldi and Lidl, has done well in its home market
but faced tough going in France, where hard-discounters compete
with hypermarkets who have been sharply cutting prices to lure
shoppers in difficult economic times.
In France, the market share of discounters has slipped to
12.2 percent in 2013 from a 2009 peak of 14.9 percent, according
to Kantar WorldPanel data. DIA's French market share was 1.6
percent last year.
Le Figaro also said that an alternative plan for the French
authorities keen to avoid store closures and preserve jobs could
be to divide up the DIA stores among all French retailers,
including unlisted Auchan, Leclerc, Systeme U and Intermarche.
"It's indeed a method used in some industrial deals, so it's
not entirely ruled out. But for now this scenario is not under
consideration," the source said.
($1 = 0.7349 euros)
($1 = 0.7349 Euros)
(Additional reporting by Carlos Ruano in Madrid; Editing by
David Holmes and Greg Mahlich)