Xavier Niel SPAC Said to Weigh Bid for French Supermarket Chain

Billionaire Xavier Niel’s blank-check company is studying a potential takeover of Grand Frais, the network of fresh food supermarkets in France, people familiar with the matter said.

The special purpose acquisition company, known as 2MX Organic SA, is considering a purchase of Grand Frais’s parent company Prosol, the people said, asking not to be identified discussing confidential information. 2MX Organic last week raised 300 million euros ($364 million) on the Paris stock exchange to target deals in the market for sustainable consumer goods.

Prosol’s owners plan to start seeking a buyer for the company early next year, the people said. The company, which is majority owned by private equity firm Ardian, could also draw interest from buyout funds and strategic bidders, according to the people. Ardian could seek a value of as much as 4 billion euros, three of the people said, while others said Prosol could fetch closer to 2 billion euros.

Grand Frais operates food halls, generally located on the outskirts of urban centers, that offer fresh fruit and vegetables, meat, seafood and dairy products. It’s unclear whether 2MX Organic would look to buy the business on its own or team up with a partner, one of the people said.

Representatives for 2MX Organic and Ardian declined to comment, while officials at Prosol didn’t immediately respond to LinkedIn messages seeking comment.

European consumption of organic food has more than doubled over the past decade, according to 2MX Organic’s IPO prospectus. This rising demand for healthier eating has attracted investors like PAI Partners, which agreed in November to buy 60% of Euro Ethnic Foods SA, which operates the grocery section of Grand Frais.

Niel, who founded French carrier Iliad SA, teamed up with Centerview Partners banker Matthieu Pigasse and supermarket chain owner Moez-Alexandre Zouari to set up 2MX Organic. Zouari is known in France for his investment in frozen-food retailer Picard. He was among suitors pursuing organic supermarket chain Bio C’Bon before Carrefour SA agreed to buy it last month.

2MX Organic will target both food producers and distributors in a bid to consolidate the market, Edouard Lacoste, an adviser to its board, said at an online opening bell ceremony last week. It will look to strike a deal for as much as 2 billion euros in the first half of 2021, Lacoste said.

Ardian bought its majority stake in Prosol in 2017, with Prosol founder Denis Dumont also reinvesting in the business at the time. Dumont is one of France’s richest people with a fortune of around 400 million euros, according to French magazine Challenges.

©2020 Bloomberg L.P.

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