Imperial Tobacco Seals Logista Move

Source from:  ft.com By Jeremy Lemer January 25 2008 01/28/2008

Imperial Tobacco, owner of the Lambert & Butler, Davidoff and JPS cigarette brands, intends to buy the remaining shares it does not own in Logista, a Spanish logistics company, for about €910m (£675m). Imperial acquired 59.62 per cent of the Spanish company when it bought Altadis, the Spanish maker of Gauloises and Gitanes cigarettes, a deal that was completed on Friday. Gareth Davis, chief executive, said the company had to buy Madrid-based Logista because it would be too hard to find a bidder during a three-month deadline imposed by regulators. The recent credit squeeze has made it much harder for potential buyers to raise capital for buy-outs. Imperial's unconditional offer for Logista will be worth €52.50 a share, €2.50 higher than the previous closing price. Logista has logistics operations in Spain, Portugal, Italy and France, providing services to the tobacco, public and banking sectors, among others. Imperial is to launch a slightly lower-than-expected £5bn underwritten rights issue – one of the largest seen in the UK – to part-finance the Altadis bid. Imperial shares rose 9 per cent, or 202p, to £24.30p. Imperial received acceptances for its €50 a share all-cash Altadis offer from shareholders with 95.81 per cent of the company's shares, well over the 80 per cent minimum required to seal the purchase. Under Spanish takeover law, Imperial had to reduce its stake in Logista below 30 per cent or launch a full takeover bid within three months. Mr Davis said the decision was "consistent with our view that this is an attractive and profitable business in its own right". Previously, Imperial had expected to take control of Altadis by the end of 2007, but the company said at the time that new takeover rules in Spain had delayed the process of approval. Imperial's bid, launched last year, valued the company at an enterprise value of about €16.2bn. Observers said the deal would consolidate Imperial's position as the world's fourth-largest tobacco group. A process of rapid integration will now begin, the company said. The enlarged group is expected to generate cost savings of approximately €300m by the end of September 2010, as well as additional revenue. Enditem