Altadis Receives Approach From Imperial Tobacco
MADRID -- Spanish-French tobacco company Altadis SA said Thursday it received an unsolicited approach from U.K.-based Imperial Tobacco Group PLC, in the latest signal that the global tobacco industry is poised for dramatic consolidation.
The preliminary offer of €45 ($59.53) per Altadis share, valuing the manufacturer of Gitanes and Ducados brands at €11.52 billion, represents a 15.7% premium from Wednesday's closing price of €38.89.
Altadis, which currently has a market value of around €9.96 billion, said in a statement that its board will meet in coming days to discuss the offer. The approach was made Wednesday night, the company added. Tuesday, Altadis denied a local media report that it was in talks with Imperial, which makes Lambert & Butler and JPS cigarettes as well as Rizla rolling papers.
Imperial had appeared to rule itself out of the running for Altadis last month when it agreed to buy Commonwealth Brands, the U.S.'s fourth-largest tobacco company, for $1.9 billion in cash.
Imperial Chief Executive Gareth Davis has said in the past that the tobacco sector is ripe for consolidation and that he expects the six major international tobacco groups to one day become four. The combination of Altadis with Imperial as well as the Japan Tobacco/Gallaher deal would leave just four major tobacco companies -- the other two being British American Tobacco PLC and Altria Inc's Philip Morris.
Altadis said the approach is subject to due diligence, estimated to last not more than three weeks. Imperial said in a statement Thursday that "discussions are at a very early stage and there can be no certainty that this approach will lead to an offer being made."
The offer would be conditioned upon a recommendation from Altadis's board once it gets regulatory clearance. It would also hinge on obtaining financing, and on obtaining acceptances from 80% of Altadis's shareholders. It is also subject to the removal of voting-rights limits, currently set at 10%, Altadis said in a statement posted on its Web site.
Altadis said the approach isn't binding. Company officials declined to provide further details.
Spain stock-market regulators suspended trading on the company's shares before markets opened Thursday. The suspension was to be lifted at 1115 GMT.
Write to Santiago Perez at santiago.perez@dowjones.com
The preliminary offer of €45 ($59.53) per Altadis share, valuing the manufacturer of Gitanes and Ducados brands at €11.52 billion, represents a 15.7% premium from Wednesday's closing price of €38.89.
Altadis, which currently has a market value of around €9.96 billion, said in a statement that its board will meet in coming days to discuss the offer. The approach was made Wednesday night, the company added. Tuesday, Altadis denied a local media report that it was in talks with Imperial, which makes Lambert & Butler and JPS cigarettes as well as Rizla rolling papers.
Imperial had appeared to rule itself out of the running for Altadis last month when it agreed to buy Commonwealth Brands, the U.S.'s fourth-largest tobacco company, for $1.9 billion in cash.
Imperial Chief Executive Gareth Davis has said in the past that the tobacco sector is ripe for consolidation and that he expects the six major international tobacco groups to one day become four. The combination of Altadis with Imperial as well as the Japan Tobacco/Gallaher deal would leave just four major tobacco companies -- the other two being British American Tobacco PLC and Altria Inc's Philip Morris.
Altadis said the approach is subject to due diligence, estimated to last not more than three weeks. Imperial said in a statement Thursday that "discussions are at a very early stage and there can be no certainty that this approach will lead to an offer being made."
The offer would be conditioned upon a recommendation from Altadis's board once it gets regulatory clearance. It would also hinge on obtaining financing, and on obtaining acceptances from 80% of Altadis's shareholders. It is also subject to the removal of voting-rights limits, currently set at 10%, Altadis said in a statement posted on its Web site.
Altadis said the approach isn't binding. Company officials declined to provide further details.
Spain stock-market regulators suspended trading on the company's shares before markets opened Thursday. The suspension was to be lifted at 1115 GMT.
Write to Santiago Perez at santiago.perez@dowjones.com
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