October 11, 2018 / 5:27 PM / 2 months ago

UPDATE 1-Italy's Esselunga hires Zaoui to weigh up stock market listing -source

(Adds another source, analyst on possible valuation)

MILAN, Oct 11 (Reuters) - Italian supermarket chain Esselunga has hired London-based advisory firm Zaoui & Co to assess options including a possible stock market listing, two sources familiar with the matter said on Thursday.

The sources were confirming a report in Italian daily Il Messaggero, which said Zaoui would soon contact banks including Intesa Sanpaolo, UniCredit, Credit Suisse, Mediobanca and Goldman Sachs over Esselunga’s plans.

The group could go public next year, the newspaper said, adding that it could be valued at more than 7 billion euros ($8.11 billion), without clarify whether this figure included net debt.

It was not possible to reach Esselunga and Zaoui for comment.

Esselunga, founded by late entrepreneur Bernardo Caprotti, is 70 percent owned by Caprotti’s second wife Giuliana Albera and their daughter Marina.

The rest of the company is owned by Caprotti’s two children from his first marriage, Giuseppe and Violetta, who have been locked in a legal dispute with the rest of the family over their father’s estate.

In June last year both sides of the family reached a deal to merge the supermarket chain with Villata Partecipazioni, the business that owns its real estate assets.

The supermarket chain recorded revenue of 7.75 billion euros ($9 billion), an adjusted core profit of 648 million euros and net financial debt of 848 million euros last year.

Current valuations for Esselunga’s strongest rivals in Europe see an enterprise value between 10.1 times their expected core profit for 2018 or at 9.4 times core profit expected in 2019, a sector analyst said.

He added that the average valuations for the rest of food retailers in Europe were based on multiples of 6.3 times expected core profit in 2018 and 6.1 times 2019 core profits.

Based on these multiples and Esselunga’s results in 2017, the firm could have a market value of between 3.11 billion and 5.7 billion euros.

$1 = 0.8642 euros $1 = 0.8636 euros Reporting by Claudia Cristoferi and Elisa Anzolin; Writing by Valentina Za and Francesca; editing by Mark Bendeich and Elaine Hardcastle

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