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French plan new shop tie
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May 3, 2000: 8:11 a.m. ET
Casino, Galeries Lafayette to divide supermarket chain Monoprix 50:50
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LONDON (CNNfn) - Investors gave a planned alliance between French retailers Casino and Galeries Lafayette a mixed reception Wednesday.
Casino, France's second-ranked retailer, agreed to raise its stake in supermarket chain Monoprix to 50 percent by buying stock from Galeries Lafayette, the controlling shareholder of Monoprix, and bidding for shares from minority investors. The offer, announced after the market closed Tuesday, values Monoprix at  2.12 billion ($1.91 billion).
Casino (PCO) shares fell 5 percent to 99.20 by midday in Paris Wednesday, while Lafayette (PGL) jumped almost 6 percent to 203. Trading in all three companies' shares was suspended Tuesday, with Monoprix still not trading Wednesday.
 The deal is the latest of a series of mergers and acquisitions in the European retail sector, seen partly as defensive reaction to the expansion in the region of Wal-Mart Stores (WMT: Research, Estimates), the world's biggest retailer.
Casino's move follows the agreed $16.6 billion takeover by Casino's rival Carrefour (PCA) of Promodès last August to become Europe's largest retailer.
Casino is offering 219 in cash for each Monoprix share, a 52 percent premium over its closing price Friday, or 5 of its own shares for every 11 Monoprix shares. Casino already owns 21.4 percent of Monoprix.
Galeries Lafayette, a leading department store operator, said it would sell 21.9 percent of Monoprix to Casino, reducing its stake to 50 percent. Lafayette would take a 3 percent holding in Casino. 
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