Brokerage Kepler switches analyst’s coverage in France after ‘intimidation’

Kepler Cheuvreux has informed clients that one of its equity analysts has received “anonymous intimidation attempts”, which the brokerage firm said was because of her coverage of certain European retailers. 

The brokerage, whose shareholders include European banks such as Crédit Agricole and UniCredit, emailed its clients on Wednesday to explain that the threats led to a “change in the perimeter of coverage” for the analyst. The brokerage added that the intimidation attempts were “in relation to some of her publications in the food retail sector”.

The Kepler employee, who has worked in equity research for banks and brokerages for more than 20 years, has now stopped covering French supermarket group Casino and German wholesaler Metro as a result, according to emails seen by the Financial Times. 

While the analyst in question had a “hold” rating on Metro, indicating a neutral view on the company’s stock price, she had a “reduce” rating on Casino, predicting that its badly battered shares would likely fall further. 

Metro said that it appreciated the “always good and constructive co-operation” with the analyst concerned and condemned any threats made against her.

“We expressly declare our solidarity with her in the face of such intimidation attempts,” the German company added.

Casino said it had “taken note” of Kepler’s statement about the analyst. “We do not have more information on this topic. Of course, we condemn any intimidation against anyone,” it added.

Kepler did not respond to requests for comment.

Casino’s share price plunged to its lowest level in decades last month, after the heavily indebted French supermarket group reported weaker profits as Covid-19 pushed up costs.

The stock is controlled by French businessman Jean-Charles Naouri, who put the group’s parent companies into a court-protected restructuring procedure last year. Known as a procédure de sauvegarde under French law, it is similar to a bankruptcy proceeding and gives Mr Naouri more than a decade to pay down substantial debts that sit above Casino itself.

Kepler took its negative stance on Casino’s shares in May 2019, a week before its chief shareholder filed for creditor protection, telling clients that its immediate parent company Rallye was “likely to be virtually bankrupt” in coming years.

Mr Naouri has been outspoken in his criticism of short sellers who bet against his company’s share price, telling the Financial Times in 2018 that they do so “at their risk and peril”. 

Critics of Casino have previously complained that they have fallen victim to harassment or surveillance. In late 2017, US investor Carson Block, who had been shorting Casino’s shares, revealed an incident in which a French corporate intelligence operative posed as a Wall Street Journal reporter in an attempt to uncover more information about his hedge fund’s strategy.

While Mr Block has said that he believes Casino or Mr Naouri may have been behind the move, they have consistently denied any role in the matter.