AP News, March 15th, 2007
Tobacco company Altadis SA said Thursday that Imperial Tobacco Group PLC has suggested making a $15.2 billion offer for the maker of Fortuna, Gitanes and Ducados cigarette brands.
Altadis said in a statement that its board will meet within days to discuss what it called a non-binding "approach" that values Europe's fourth-largest tobacco company at 11.52 billion euros.
Imperial Tobacco confirmed that it had made an approach to Altadis, but cautioned that discussions are at a very early stage and there was no certainty that it will lead to an offer being made.
The suggested price values the Spanish-French manufacturer at 45 euros ($59.4) per share, a 15.7 percent premium over Altadis' closing price on Wednesday.
But Altadis shares jumped 19.3 percent to 46.4 euros ($61.30) in trading on Thursday _ above the suggested price. Imperial Tobacco shares rose 6.4 percent to 2,177 pence ($41.99) on the London Stock Exchange.
Altadis said the approach "to combine both groups" is subject to due diligence, estimated to last not more than three weeks.
Altadis shares have posted strong gains in recent sessions on speculation that it could become a takeover target as the global tobacco industry consolidates amid wider antismoking restrictions.
The offer would be conditioned upon Altadis' board recommending the offer once it gets regulatory clearance. It would also hinge on obtaining financing, and on obtaining acceptances from 80 percent of Altadis' shareholders.
It is also subject to the removal of voting rights limits, currently set at 10 percent, Altadis said in a statement posted on its Web site.
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On the Net:
http://www.altadis.es
http://www.imperial-tobacco.com
