Imperial Tobacco Is Lit up on China Whispers As CNT Is Considering £45 A Share Cash Bid

Source from:  This is Money 01/07/2016

Shares of Imperial Tobacco were puffed 63.5p higher to 3602.5p on revived takeover talk.

Speculation has been rife in recent months that either Japan Tobacco or British American Tobacco and a 'friend' were planning a multi-billion-pound break bid for Imps, which would value the world's third-biggest tobacco group at £48billion. Yesterday, the name of a new possible bidder lit up proceedings.

Hot gossip suggested that China National Tobacco, or CNT, which enjoys a virtual monopoly in China and is the world's largest manufacturer of tobacco products measured by revenues, is considering launching a cash bid in the region of £45 a share for Imps.

Dealers said it made sense because CNT is probably the only company that could buy Imps without anti-trust issues affecting the outcome. Speculation also suggested that before making a move, CNT has already reached agreement with other companies which have agreed to take some of Imps' unwanted assets.

CNT produces more than 900 brands, the largest of which, Hongtashan, accounts for only 4 per cent of total sales. China is the world's largest consumer and producer of cigarettes. There are 350million Chinese smokers and China produces 42 per cent of the world's cigarettes.

Rival British American Tobacco added 19p at 3728p following bullish comments from Citigroup about a recent cigarette price rise in Brazil. Enditem