Only 48 hours were enough for someone interested in buying to suggest Success Storesafter Grupo Casino announced its interest in selling because it needs money to pay its million-dollar debts.
The interested? Businessman Jaime Gilinsky. His family and IHC Capital Holding are also about to close the purchase of 87 percent of Nutresa, one of the most important food companies in the country.
(Also read: Success: the operation proposed by Gilinski for US$ 836 million to buy the chain)
Gilinski is offering $836 million in cash for the entire 96.52 percent stake that Companhia Brasileira de Distribuição (GPA) owns in Éxito.
It is the business world and I think that Casino does not have very good offers in this regard
And the board of directors only has until July 7 to analyze and decide whether or not to accept this proposal that, according to analysts, is less than the current value of the companywhich is present in 23 departments of Colombia with 515 stores.
For Andrés Moreno, advisor and financial analyst, Jaime Gilinski “seeks to fish in a troubled river” and the offer that he presented to GPA “is not good”, but it is a decision that Casino will also have to study.
Says Gilinski is giving a discounted price and not a premium. “It is the business world and I think that Casino does not have very good offers in this regard, for me it is going to happen (the operation)”.
“If you think it’s easy to get money in a retail business that is complicated and tight, where hard discounter chains are taking a large part of the market, it may happen,” added Moreno.
in accordance with Camilo Andrés Thomas, variable income director at Alianza ValoresThe 836 million dollars that Gilinski is offering, is equivalent to a price per share close to 2,768 pesos, a value lower than the last one traded in the market, which was approximately 4,200 pesos.
The offer is 34 percent below the share’s closing price on Wednesday.
This is an opinion that is also shared by Ómar Suárez, manager of Variable Income at Casa de Bolsa, since the offer is 34 percent below the stock’s closing price on the day of Wednesday.
In addition, it highlights that no control premium is being proposed which is common in transactions in which one person buys more than 50 percent of a company and retains decision-making control. In the books it is said that it can be between 20 and 30 percent.
Gilinski’s proposal is less than the book value of Éxito, which is also 5,400 pesos per share. If it is selling below this price, it is selling below the value of the company.
“There are commission agents who set a target price of 6,000 pesos, but obviously Gilinski is looking for an opportunity to negotiate given the seller’s need,” says Andrés Moreno.
(Also read: With Success, more than a quarter of the retail trade would be sold)
Will a monopoly be created in Colombia?
For Jaime Gilinski to stay with Almacenes Éxito, it is not only necessary for Casino and GPA to accept the offer, but also for Financial Superintendence and the Colombian Stock Market give your approval.
The Superintendence of Industry and Commerce is also required to rule on whether this operation could affect free competition in the country or if a monopoly could be created.
Camilo Andrés Thomas states that This operation could have a restriction due to vertical integration in the food business., since Gilinski will be the owner of Nutresa, producer and marketer in this industry. However, it will be the Superindustry that must make the respective evaluation.
(Read also: Not only Éxito: millionaire businesses that would change owners if Casino de Colombia left)
In the country, this conglomerate has 563 of its 2,541 stores.
Archive / WEATHER
The country cannot break competition rules and we must prevent monopolies
Meanwhile, the Minister of Finance, Ricardo Bonilla, stated that “the country cannot break the rules of competition and we must prevent monopoliesbut this is a matter for the superintendence”.
Another point that Andrés Moreno highlights about this possible operation is that Nutresa -now part of the Gilinski family- preferentially dispatches its products to Alkosto, which is the direct competition of Éxito. Therefore, if Gilinski stays with Almacenes Éxito, Nutresa could have the priority of supplying Éxito over Alkosto.
The great unknown that is present today is how much they are willing to sell Éxito under Casino and GPA. They will have to decide between the need to get money to pay off debts quickly or expect a better offer that reflects the real value of this chain of storeswhich is not only present in Colombia but also in Uruguay and Argentina.
