By Dominique Vidalon and Mathieu Rosemain
(Reuters) -Czech billionaire Daniel Kretinsky pressured the management of French retailer Casino to sell its largest stores ahead of his planned bailout of the group, a source close to the matter said on Wednesday.
Kretinsky expressed concern about the feasibility of keeping the cash-burning stores to the company's founder Jean-Charles Naouri, notably after Casino issued two profit warnings in the last two months due to the worsening situation at its hypermarkets.
"Discussions were frank," the source said, adding that in-depth changes to the Casino bailout plan were hinted at.
Casino is racing to complete a bailout deal to avoid bankruptcy early next year, at which point Kretinsky will take control of the group.
A source close to Kretinsky however denied any pressure was put on Casino, stressing the poor performance of the stores spoke for itself.
The French supermarket group on Monday said that it has received expressions of interest for its hypermarket and supermarket stores, declining to name the bidders or number of stores it intends to sell.
Bids are expected by an indicative deadline of Wednesday.
Potential candidates include most of Casino's French rivals including Intermarché, Systeme U, Auchan and Carrefour (EPA:CARR), and also German discount group Lidl, the same source said.
At this point the most advanced talks are with Lidl and Intermarche, whose parent company Groupement Les Mousquetaires already agreed to buy about 61 stores from Casino in May.
Intermarche has a call option, exercisable within three years, for a second group of 72 stores.
Carrefour, Auchan and Lidl declined comment while Intermarche, Systeme U and Auchan could not be immediately reached for comment.
The sale of Casino's hyper and supermarkets, if completed, would sharply reduce the size of the group to some 8 billion euros in sales from 33.6 billion euros in 2022, halving its market share in France to around 3%, Barclays analyst Nicolas Champ estimates.
Reacting to the news of the potential sale, Kretinsky's investment vehicle EP Equity Investment said: "These divestitures would not in any way impact our determination to become the controlling shareholder of Casino and to invest in the development of the remaining scope, particularly in the Monoprix and Franprix brands."