Imperial Tobacco Said to Weigh IPO of Logista Business

Source from:  Bloomberg  02/14/2014

Imperial Tobacco Group Plc, Europe's second-biggest tobacco company, is considering an initial public offering of its European logistics unit, according to people familiar with the matter.

The Davidoff maker is working with Credit Suisse Group AG (CSGN) and Goldman Sachs Group Inc. (GS) on a potential IPO of Madrid-based Logista this year, said two of the people, asking not to be identified because the deliberations are private. Other options being considered by Bristol, England-based Imperial are a sale of a minority stake in the goods delivery company to a private-equity firm or a strategic partner, the people said.

A spokesman at Imperial Tobacco declined to comment as did representatives for Credit Suisse and Goldman Sachs.

The cigarette maker today reiterated full-year targets for earnings and dividend growth. Earnings per share at constant exchange rates will show a "modest" increase, while the dividend will be raised at least 10 percent, it said. Imperial also said underlying net tobacco revenue rose 1 percent in the first quarter to about 1.6 billion pounds ($2.7 billion).

Logista was acquired by Imperial in 2008 as part of the 12.6 billion-euro ($17 billion) takeover of cigaratte maker Altadis SA. Imperial inherited a 59.6 percent stake and bought the rest in a deal that valued Logista at 2.3 billion euros.

The logistics company operates across Europe in countries such as Spain, Portugal, Italy and France. It serves tobacco and non-tobacco customers, making about 40 million deliveries a year, according to Imperial's last annual report.

Adjusted operating profit at Logista fell 2 percent to 176 million pounds in the last fiscal year, Imperial said in November, citing "weak industry tobacco volumes." Distribution fees declined 5 percent to 850 million pounds.

European companies including France's Alstom SA and British lender Lloyds Banking Group Plc are planning to list their units this year after volumes of IPOs in the region reached about $38 billion in 2013, more than double what was raised in the previous year, according to data compiled by Bloomberg. Enditem