PARIS — Tensions in the heated French grocery market rose to new levels Monday, with Carrefour SA issuing a terse denial that it had approached domestic rival Groupe Casino with an eye to a merger.

“Carrefour denies having solicited Casino and is surprised that Casino’s board of directors would have been submitted a merger proposal that doesn’t exist,” said the world’s second largest retailer after Walmart.

Casino, meanwhile, said that its board met over the weekend after being contacted by Carrefour in a merger attempt and unanimously rejected the alleged approach.

“The board unanimously reiterated its entire confidence in Casino’s strategy for value creation based on its unique market positioning,” the group said, citing the presence of the companies in France and Brazil, where both have extensive operations, as barriers to a potential merger.

Both companies hinted they would take legal action to put a halt to the merger talk.

“Casino thus intends to take all necessary action to defend the group’s corporate interest, and its structural integrity, a key factor for the success of its strategy,” the group said.

“Carrefour is reviewing its legal options in order to stop these inacceptable innuendoes [sic],” said Carrefour, stressing its focus on its vast restructuring efforts, which it calls the 2022 transformation plan.

Under the leadership of Alexandre Bompard, the company is revisiting its structure, paring down sprawling out-of-town hypermarkets while reinforcing its network of smaller, convenient formats, for example.

The incident comes at a time when grocery retailers are struggling to find their place as traditional retail channels are upset by the rise of online commerce. The purchase of Whole Foods by Internet giant Amazon last year sent ripples throughout the industry, adding pressure to rethink business strategies. Complicating matters, in France, retailers are engaged in a tight battle over prices.

Casino executives have already been on the defensive against attacks from Muddy Waters, the U.S.-based activist investment fund led by Carson Block, who says the French company’s debt is too high. Shares in the retailer sank as low as 27.31 euros at the end of August, less half of their value just three years prior.

“The difficulties faced by Casino and its controlling shareholder may not justify untimely, misleading and groundless communications,” said Carrefour, referring to Casino’s stock market woes.

Casino, meanwhile, noted: “It also observed that Carrefour’s approach occurs at a time when the market for Casino’s securities has been subjected to coordinated downward speculative manipulations of an unprecedented scale over the course of the past several months.”

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