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French food retailer Auchan explored a deal with a blank check company backed by telecommunications mogul Xavier Niel and banker Matthieu Pigasse before an unsuccessful attempt to tie up with rival Carrefour, three sources familiar with the matter said. Reuters.
Discussions between the billionaire Mulliez family, who own Auchan, and 2MX Organic – which launched in December and pioneering the European Special Acquisition Company (SPAC) market – took place this summer, the sources said.
A merger would have given Auchan a quote, providing it with a currency to close deals and generate funds to revamp its hypermarket-focused business. But it would have been a leap for 2MX Organic, which raised funds from investors pledging to build a European champion in organic food.
The talks did not progress, however, as Auchan pursued an industrial merger with Carrefour that could have generated cost savings and purchasing synergies, the sources said, speaking on condition of anonymity because the affair is confidential.
Auchan’s decision to partner with Carrefour and create a French market leader with 110 billion euros ($ 127 billion) in revenue per year was overturned in early October, leaving the company in its hands empty because discussions with 2MX Organic are no longer active, the sources said. .
A spokesperson for Auchan denied discussions with 2MX Organic, adding that the company was not for sale.
2MX Organic declined to comment.
Shares of 2MX Organic, also backed by entrepreneur Moez-Alexandre Zouari, made their market debut on December 9, making it the largest IPO in France in 2020.
“The Tesla of responsible consumption”
Dubbed “the Tesla of responsible drinking” by its owners, 2MX Organic has been on the hunt for a merger candidate since the start of the year, the sources said, but has struggled to find a suitable target in a context of declining market interest in PSPCs due to a crackdown in the United States.
The sources said talks with Auchan had not resumed after the Carrefour debacle, with one adding that 2MX Organic was now working on another project.
SPACs raise funds on the stock markets with the promise of buying private companies and helping them grow. But investor interest has weakened after poor performance and a growing number of class actions, as more and more deals have turned into failures.
“PSPC’s sponsors are desperate to find a target and have started looking for deals they would never have considered before,” said one of the sources. “Some are trying to rethink their main objective in order to be able to fulfill their mission.”
In the third quarter, only 85 PSPCs were listed globally, raising $ 14 billion, compared to 309 which raised $ 95 billion in the first quarter, according to data from Refinitiv.
Many SPACs have seen their stocks fall so sharply that they are now trading below the $ 10 they were originally listed at.
News by Reuters, edited by MY. For more information on retail, click here. Click on subscribe register for ESM: European Magazine of Supermarkets.
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