Analysts Support Imperial Tobacco-Altadis Merger

Source from:  Monday, Feb. 6, 2006 tobaccoreporter.com 02/07/2006

A merger between Imperial Tobacco and Altadis makes strategic sense, says JP Morgan. The statement follows recent speculation about a merger between the two companies, reports the Dow Jones. "At a 25 percent bid premium (€44 per share) the acquisition would cost £9B (including £1.5B acquired debt)," the company says. "To keep interest cover at investment grade standard 4 times or higher, Imperial would need to use at least 25 percent equity finance. Even pre-cost savings this would result in 5 percent year one EPS accretion." Enditem