By Mathieu Rosemain

PARIS (Reuters) -Casino’s board approved moving forward with talks on Monday with Czech billionaire Daniel Kretinsky over a plan to inject 1.2 billion euros ($1.35 billion) of new money in the distressed French retailer, the group said.

Kretinsky’s attempt to gain control of Casino, France’s sixth-largest retailer, appears to be getting closer to succeeding after rival bidding group 3F Holding, led by telecoms maverick Xavier Niel, pulled out.

It would bring an end to the 30-year reign of Casino CEO and controlling shareholder Jean-Charles Naouri at a time when France’s traditional retail sector is adapting to the rise of e-commerce and hard-discount supermarket chains.

Naouri, 74, controls Casino via his listed holding Rallye.

Kretinsky has been vying to take control of Casino against the 3F Holding group, formed by Niel, investment banker Matthieu Pigasse, and businessman Moez-Alexandre Zouari.

3F said late on Sunday it was dropping its bid, citing a “biased process” and a lack of information, and after one of its backers – the Attestor Capital fund – switched sides to support Kretinsky’s bid.

It leaves Kretinsky, who submitted a revised offer over the weekend proposing the equity injection, as the only bidder.

In a presentation released late on Monday after a board meeting, Casino said the bulk of the cash injection, or some 925 million euros, would be made by a consortium comprising Kretinsky, French billionaire Marc Ladreit de Lacharriere, and Attestor.

The remaining 275 million euros would come from creditors and existing shareholders, according to the presentation. The cash injection plan would lead to a 4.7 billion-euro reduction in overall debt, Casino said.

Casino is saddled with net debt of 6.4 billion euros and is teetering on the brink of default.

The board meeting followed a separate meeting between Casino’s creditors and CIRI – France’s finance ministry body that helps distressed companies and their creditors draw up restructuring plans.

The group’s shares were suspended on Monday and are slated to resume trading on Tuesday in Paris from 0700 GMT.

In a statement on Sunday, 3F said it had decided to pull out as it “refuses to participate in a biased process – the company having obviously already chosen its buyer”.

Casino and France’s finance ministry declined to comment.

Kretinsky’s bid would give the consortium he forms with Ladreit de Lacharriere’s Fimalac and Attestor a combined 53% stake in Casino, the company said in the presentation.

Kretinsky and Ladreit de Lacharriere would control the investment vehicle behind the 1.2 billion-euro equity injection, a source said.

Kretinsky, 47, a former investment bank lawyer who built one of Europe’s largest energy groups, has been scooping up assets in retail, media and other areas after the region’s recent energy crisis boosted profits at his power, gas and coal businesses. 

He has gone on a buying spree in Britain, France and Germany, buying stakes in French national newspaper Le Monde, retailer Fnac-Darty, British supermarket chain Sainsbury’s and German grocer Metro.

His net worth stands at $9.4 billion, according to Forbes.

Casino, which has been burning through cash as revenue fell and it lost market share to rivals, has been in a debt restructuring negotiation with creditors aimed at saving the company from bankruptcy. Casino has said it aimed to find an agreement for an overall debt restructuring deal by the end of July.

The French government is concerned about possible job cuts at Casino, which employed 50,000 people in the country at the end of last year.

($1 = 0.8901 euros)

(Reporting by Mathieu Rosemain; Editing by Mike Harrison and Rosalba O’Brien)

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