Thursday June 28, 03:12 PM
Tobacco group Altadis awaits takeover proposals
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PARIS (AFP) - French-Spanish tobacco company Altadis (Madrid: ALT.MC - news) said Thursday it is awaiting takeover bids from Luxembourg-based private equity firm CVC and Britain's Imperial Tobacco (LSE: IMT.L - news) .
The company declined specific comment on a report in the Wall Street Journal that the two would make bids next week.
The Wall Street Journal said Thursday the two bidders were expected to put forward competing offers for Altadis "within days" in a deal that would be worth 13 billion euros (17.5 billion dollars) or more, making it one of the biggest tobacco deals ever.
At a news conference in Madrid the company's chairman Antonio Vasquez said "the process of due diligence (detailed examination of the group's accounts) of the two groups is finished."
Altadis makes Gauloise, Gitane and Ducados cigarettes.
The Wall Street Journal, quoting people close to the matter, said the two companies had been negotiating terms and conditions in recent days with Altadis "in anticipation of making formal bids by next week."
Last month CVC said it would potentially bid 50 euros a share for Altadis, which valued the company at 12.8 billion euros (17.4 billion dollars).
Imperial Tobacco had bid 47 euros a share for Altadis, or about 12 billion euros, an approach rejected by Altadis.
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 (Berlin: JAT.BE - news) , makers of Camel and Winston cigarettes, completed the friendly takeover of the sixth-largest group, Britain's Gallaher (LSE: GLH.L - news) , in April in a deal worth 19 billion dollars. Gallaher is the maker of the Silk cut brand.
In February Imperial Tobacco, the world's fourth biggest tobacco company, agreed to buy US cigarette maker Commonwealth Brands for 974 million pounds (1.4 billion euros/1.9 billion US dollars).
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