Casino Guichard Investors

Locked at home in self-isolation after testing positive with coronavirus in the middle of March, Czech billionaire Daniel Kretinsky spent 12 hours a day on the phone running his businesses. He still found time to scour around for new investments as markets around the world tumbled.
The owner of Energeticky a Prumyslovy Holding AS, a $7.7 billion conglomerate with interests ranging from power plants to media, Kretinsky is coy about what he found, but insists there are promising assets worth a closer look. That’s a fitting approach for a man known for scooping up energy companies across Europe and investments in German wholesaler Metro AG and French retailer Casino Guichard-Perrachon SA.
“We see opportunities already now,” Kretinsky, who has since recovered from the virus, said in an emailed response to questions. “We are already investing as we simply believe that the current market is undervaluing certain very interesting and important companies.”
As the pandemic crushes businesses and industries with lockdowns and closures that sap revenue, east-European companies such as software and gaming enterprises and home-delivery retailers are emerging as the potential winners of the fast-changing economic environment. On the Warsaw stock exchange, game developer CD Projekt SA has become the most valuable company. Similarly, Croatia’s Infobip d.o.o. and Belgrade’s UiPath Inc. are looking at ways to expand even during the worst market downturn in decades.
“I think you will have some investors who will panic and it’s going to deter some investors, especially the myopic ones,” said Marian Bocek, the co-founder of London-registered asset manager IPM Group. “But the long-term investors see this as an opportunity. If you see it, this may be the biggest opportunity since the Internet boom of the 1990s.”
Kretinsky, 44, who began his investment career as a lawyer in a local private-equity group J&T two decades ago, is among a handful of central European billionaires whose wealth doesn’t originate in the privatization schemes of the 1990s. He did partner up, though, with Petr Kellner, the richest person in the European Union’s eastern wing, to start up his own firm about 11 years ago.
Since then, a debt-fueled acquisition spree turned EPH from a small Czech utility into one of the biggest power companies in central Europe and Kretinsky into a high-profile dealmaker who is now worth $1.6 billion, according to the Bloomberg Billionaires Index. EPH had revenue of 7 billion euros in 2018 and valued its assets in the Czech Republic, Slovakia, Germany, Italy, the U.K., Hungary and Poland at about 13.3 billion euros.
Kretinsky’s portfolio includes Prague’s premier soccer team, Sparta, and the publishing house of Czech most-read tabloid Blesk. Together with partners, he also owns minority stakes German media company ProSiebenSat.1 Media SE and French newspaper Le Monde.
Kretinsky says all his investments are naturally affected by the global pandemic, although to a varying degree. Among businesses doing well is e-commerce, which is flooded by millions of online orders after lockdowns shut non-essential shops.
On the other hand, he said media businesses are suffering more and the industry should be eligible for some form of the state support. The core energy assets have been impacted to a “lesser extent, given the essential nature of our services,” Kretinsky said.

Rational Voice

Even in retail, the effects of the crisis differ. Metro wasn’t hit in the first few weeks, but closures of hotels, restaurants and bars in France, Italy and Spain will be “very painful.” On the other hand, Casino seems to have been buoyed as it provides vital services to the French society, he said.
As businesses and governments hunker down across Europe, Kretinsky sees the role of corporate leaders to bring a rational voice to the public debate. Any crisis is a good opportunity for costs savings and optimizations, but a moderate approach should now prevail, according to Kretinsky.
“Those who will not react enough will lose all or a lot, but those who will over-react will lose as well, potentially a lot,” said the billionaire, who counts the 17th century English philosopher Thomas Hobbes among his favorite authors.
The length of the shutdowns will determine the impact on businesses and economies, he said, adding that there is also a potential psychological risk as fear-driven consumer behavior could bring “deep structural changes.”
Efforts to deploy the right solutions are being complicated by wrong public perception of the coronavirus risks, Kretinsky said. And while the pandemic is a serious problem, he sees the numbers showing that it isn’t a life-or-death threat for standard population with no important underlying health problems.
“The fight or war against the coronavirus is hence not a war to safe mankind or millions,” he said. “This is a war to prevent avoidable deaths.”
By Lenka Ponikelska and James M Gomez — With assistance by Alexander Sazonov - Bloomberg