Casino, led by Jean-Charles Naouri, has around 3 billion euros ($3.3 billion) of debt maturing between 2024 and 2025.

Currently it is in exclusive talks to combine its French retail business with Teract, a company backed by billionaire Xavier Niel, as it seeks to reassure investors over its ability to generate cash and reduce debt.

Casino said in a separate announcement on Monday that Groupement Les Mousquetaires, owner of supermarket chain Intermarche, had joined the exclusive tie-up talks.

EP Global Commerce a.s, a Czech company controlled by Kretinsky proposed to subscribe to capital increases at Casino worth an aggregate 1.1 billion euros ($1.2 billion).

The company is already Casino's second largest shareholder with a stake of 10.06%.

"At this stage, Casino Group has acknowledged the proposal," Casino said in a statement.

"If it were to respond positively to this proposal, the implementation of the transactions proposed by EP Global Commerce a.s. could, depending on the financial parameters ultimately agreed between the parties, lead to a change of control of Casino and to a dilution which might be very significant for existing shareholders," it said.

EP Global Commerce proposed to subscribe to a reserved capital increase of up to 750 million euros in Casino's share capital.

It offered Fimalac, Casino's third largest shareholder, the opportunity to subscribe to a reserved capital increase of up to 150 million euros.

A capital increase of up to 200 million euros with preferential subscription rights would also be offered to Casino's other existing shareholders.

($1 = 0.9104 euros)

(Reporting by Sudip Kar-Gupta; editing by Dominique Vidalon and Jason Neely)

By Dominique Vidalon