Imps Says Altadis Deal on Track

Source from:  ft.com By Maggie Urry September 19 2007 09/20/2007

Imperial Tobacco said its €12.6bn (£8.8bn) bid for Altadis, the Franco-Spanish cigarette maker, was on track and had been unaffected by difficulties in financial markets. Terms of its €50 a share offer were finalised in July and Imperial said it had "committed funding in place". It also plans a £5.4bn rights issue. Including Altadis' debt, Imperial will have to pay £11bn for the business, which will add the Gauloises and Gitanes brands to its Lambert & Butler, Davidoff and JPS names. Imperial said it still expected the deal to be completed by the end of the calendar year. After receiving clearance from US competition authorities it is awaiting a similar go-ahead from the European Union and for approval by CNMV, the Spanish regulator, of its offer document. That was expected "in the next few weeks". Meanwhile, Imperial said in a trading update that the figures for the year to end- September were in line with management's expectations. Its results will be published on October 30. It said there had been a decline in cigarette volumes when the ban on smoking in public buildings came into effect in England, Northern Ireland and Wales, but it expected the pattern seen in Scotland and the Republic of Ireland – an initial dip and gradual recovery – to be repeated. When the ban was introduced in Scotland last year, sales fell initially by 8 per cent, but Imperial said it was too early to give a figure for the decline it had seen in the areas with the more recent bans. However, it said the effect of the ban had been mitigated by rising market share, while profitability had benefited from higher prices and cost savings. Imperial also achieved a higher share of a declining market in Germany, while elsewhere in western Europe gains in profitability followed market share increases and improved pricing. Commonwealth Brands, the US business acquired earlier this year, had made "a good six month contribution" in line with expectations and had lifted the group's overall margin. Interim results showed a 3 per cent rise in pre-tax profits to £566m. Analysts are expecting about £1.25bn for the full year. The shares fell 9p to £22.01 yesterday. Enditem