Imperial Claims Altadis Victory with €12.6 Billion Bid

Source from:  business.timesonline.co.uk July 18, 2007 07/19/2007

Agreed deal with Franco-Spanish rival will see Imperial Tobacco close the gap on JTI-Gallaher, the world's third-largest cigarette group Imperial Tobacco claimed victory today in the four-month bid battle for Altadis by agreeing a €12.6 billion (£8.5 billion) takeover with its Franco-Spanish rival. The Bristol-based cigarette giant revealed that it would pay €50 a share for Altadis, the maker of Gitanes and Gauloises cigarettes. The offer is 11 per cent higher than Imperial Tobacco's opening €45 per share bid in March. Including debt, the deal values Altadis at €16.2 billion. Imperial will launch a £5 billion rights issue over the next year to help to fund the acquisition, which cements its position as the fourth-biggest cigarette group in the world. It has also agreed a new £9.2 billion bank debt facility with a consortium of banks including Citi, Royal Bank of Scotland, Lehman Brothers, Barclays and Banco Santander. Imperial shares rose 12p to 2213p. Gareth Davis, the Imperial Tobacco chief executive, said: "I am pleased to announce that the Altadis board will recommend our proposed offer to shareholders. "This deal significantly enhances our operating platform and scale with an increased presence in profitable mature markets and improved emerging market opportunities. He added: "When combined with the substantial operating efficiencies we expect to achieve, we believe this represents an excellent deal for Imperial Tobacco and one that will create significant value for our shareholders." Imperial is targeting "operational efficiencies" of €300 million a year from the Altadis deal. Antonio Vázquez, the chief executive of Altadis, and Jean-Dominique Comoli, the chairman, will both join the Imperial board of directors once the deal goes through. While Imperial will retain its headquarters in Bristol, the headquarters of the group's cigar division will be in Madrid. Enditem