French retailer Casino says it is in alliance talks with Teract
PARIS, Feb 1 (Reuters) - French retailers Casino (CASP.PA) and Teract (TRACT.PA) confirmed on Wednesday they had begun exploratory discussions that could lead to the combination of the two groups' distribution activities in France within a single entity controlled by Casino.
Teract shares gained 5.9% to 6.46 euros on the French stock market after Bloomberg News reported earlier on a possible tie-up between the companies.
That puts the value of the retailer, backed by billionaire Xavier Niel and which operates in both the food and the garden/pet sectors, at close to 450 million euros ($491.13 million).
"In response to rumours in the press, the Casino group confirms that it has begun exploratory discussions with Teract that could lead to the combination of the two groups' distribution activities in France within a single entity controlled by Casino," Casino and Teract said in a statement.
They said the deal could also lead to the establishment of a newly created entity controlled by Teract shareholders that would be responsible for the supply of agricultural, local and short-cycle products.
Both companies added that discussions were at a preliminary stage and there could be no certainty that any transaction will be concluded.
Casino shares rose 1.86% to 11.49 euros, giving the indebted retailer a market value of over 1.2 billion euros.
The company, which has been facing concerns over high debts and low cash flows, hopes to complete a 4.5 billion-euro disposal plan by the end of 2023.
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