Imperial Shares Buoyed by Takeover Talk

Source from:  Tobacco Reporter 04/19/2011

Takeover talk helped buoy Imperial Tobacco on Friday as the FTSE 100 edged higher, according to a story by Michael Hunter for the Financial Times. Shares in Imperial rose 1.9 per cent to £20.39 after Goldman Sachs argued that the cigarette maker was the most likely takeover target when sector consolidation returns. Low debt levels, strong cash generation, below average valuations and a lack of organic growth among the main cigarette makers suggested conditions were right for the four biggest tobacco makers to become three, analyst Fulvio Cazzol, was reported to have said. Of the four, Philip Morris International would face too many competition hurdles while Japan Tobacco looked an unlikely bid target given the Japanese government's blocking stake, Goldman said. The most likely deal was therefore that British American Tobacco would buy Imperial, the smallest of the four, it continued. Enditem