Friday May 4, 05:01 PM
Altadis reveals takeover bid from private equity groups
MADRID (AFP) - French-Spanish tobacco group Altadis (Madrid: ALT.MC - news) said on Friday that it had received a preliminary 50-euro-per-share takeover offer from private equity groups CVC and PAI Partners that values the firm at 12.8 billion euros (17.4 billion US dollars).
The offer trumps a rival bid of 47 euros per share by British cigarette maker Imperial Tobacco (LSE: IMT.L - news) which is worth 12 billion euros.
Altadis, the world's fifth-largest tobacco company, said that its board would meet in the coming days to evaluate the bid by London-based CVC and France's PAI Partners.
Formed in 1999 through the merger of France's Seita and Spain's Tabacalera, Altadis has more than 27,000 employees and is the maker of Gauloises cigarettes and Cohiba cigars.
Analysts said the approach by the private equity groups could spark a bidding battle for the group.
"The idea is that now Imperial will have to respond," said a dealer at a leading Spanish bank who asked not to be named.
The bid by CVC and PAI is conditional on approval by Altadis' board, acceptance from shareholders representing 75 percent of the group's capital and the end to a 10-percent cap on voting rights, the statement said.
Altadis' board has unanimously rejected the offer by Imperial Tobacco, which was raised from an initial bid of 45 euros per share made in March, as too low.
With anti-tobacco legislation starting to bite, the tobacco sector is in a process of consolidation as companies seek economies of scale.
The world's third-largest tobacco group, Japan Tobacco (Stuttgart: 893151 - news) , completed the takeover of the sixth-largest group, Britain's Gallaher (LSE: GLH.L - news) , last month.
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