Big C stake sold to Thai TCC
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Big C stake sold to Thai TCC

Big C has 174
Big C has 174 "supercenter" malls and mini-marts nationwide including this one on Ratchadamri Road in Bangkok. TCC Group of Chang beer-Mekhong whisky billionaire Charoen Sirivadhanabhakdi has purchased the Thailand-based stores and business of France-based Casino Group for 121 billion baht. (Photo by Nobhon Kananurak)

France's Casino Group has agreed to sell its majority stake in Thai hypermarket operator Big C Supercenter for about $3.4 billion (121 billion baht) to Thailand's TCC Group, a person with direct knowledge of the matter said on Sunday.

The deal is a part of the French food retailer's debt reduction plan. Casino announced a 4-billion-euro ($4.46 billion) deleveraging plan in 2016, including the sale of its Vietnam unit and its stake in the Thai hypermarket.

Casino's plan to sell the Thai unit came after a December report by short-seller Muddy Waters that said the French firm was "dangerously leveraged", prompting its worst stock slide in seven years. The Vietnam unit sale had been planned earlier.

A senior official from Central Group, which was also bidding for Casino's 58.6% stake in Big C, confirmed that the group had lost to TCC in the bid.

The deal adds to the $50.6 billion of acquisitions in Southeast Asia over the past 12 months. Shares of Big C have gained 12% this year, giving it a market value of 187.3 billion baht ($5.3 billion).

The French retailer said the transaction will reduce debt by 3.3 billion euros, including Big C's borrowings. Casino said it expects to complete the transaction by March 31.

The first source, who did not want to be identified, said TCC - controlled by Thai tycoon Charoen Sirivadhanabhakdi, best known for his control of Chang beer and Mekhong and Saeng Som whiskys - had offered 253 baht ($7.12) a share for the controlling stake, or around 11 percent more than Big C shares' close on Friday.

The Big C deal would make for Thailand's second-biggest inbound acquisition after 2013's $6.6-billion purchase by CP All PCL of cash-and-carry wholesaler Siam Makro Pcl.

The Wall Street Journal earlier reported the deal.

It was not clear whether Central Group would sell its 25 percent stake in Big C, a retailer it originally founded in 1993 and then sold a majority stake to Casino in 1999.

Central declined to comment on the matter. Casino, TCC and Big C were not available for immediate comment.

The first source said Casino and TCC had moved quickly to present binding bids and financing to preempt others coming in.

The deal should help Casino deleverage. Ratings agency Standard & Poor's last month put the firm's debt on "negative watch" for a possible downgrade to junk status, citing concerns over the retailer's high debt pile and weakness in Brazil.

Big C is Thailand's second-largest hypermarket operator after Tesco's Thai unit, and has a market capitalisation of 163.25 billion baht ($4.60 billion).

Mr Charoen's acquisition of Big C would boost the tycoon's retail presence in Thailand. He owns Berli Jucker PCL, the listed retail arm of TCC.

The Big C deal would make for Thailand’s second-biggest inbound acquisition after 2013’s $6.6-billion purchase by CP All Pcl of cash-and-carry  wholesaler  Siam  Makro  Pcl. 

It  was  not  clear  whether  Central Group would sell its 25% stake in Big C, a retailer it originally founded in 1993 and then sold a majority stake to Casino in 1999.

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