25th Jan 2008 07:36
Imperial Tobacco Group PLC25 January 2008 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR FROM THE UNITEDSTATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA. 25 January 2008 Imperial Tobacco Group PLC Announces the Final Result of its Offer for Altadis,S.A. Summary •The Spanish Securities and Exchange Commission, the CNMV, today published the final result of Imperial Tobacco's takeover bid for Altadis. •Acceptances in respect of approximately 95.81% of the Altadis shares were received. The 80% minimum acceptance condition has been satisfied and the Offer has become unconditional. •Imperial Tobacco now plans to use the squeeze-out process to compulsorily acquire all of the outstanding Altadis shares and to delist the Altadis shares. •Imperial Tobacco states its intention to launch a tender offer for the shares in Logista which are not already owned by Altadis at a price of €52.50 per Logista share. This values the outstanding Logista shares at a total of approximately €910 million (excluding treasury shares) and values the entire share capital of Logista (excluding treasury shares) at approximately €2,300 million. •The acquisition of Altadis will be financed through new bank facilities and an underwritten rights issue, which we currently estimate will be no more than £5 billion, to be completed by 18 July 2008. The actual size of the rights issue will be dependent upon a number of factors. The purchase of all of the minority shares in Logista will not significantly influence the size of the rights issue and we currently estimate that it could increase by around £200 million when compared to selling down all of Altadis' holding of 59.62% of the entire issued share capital of Logista. •Jean-Dominique Comolli, the current Chairman of Altadis, has indicated he will accept an invitation to join the Board of Imperial Tobacco as non-executive Deputy Chairman. •Antonio Vazquez, the current Chief Executive Officer of Altadis, has decided not to accept an invitation to join the Board of Imperial Tobacco for personal reasons but has accepted an invitation to act as a consultant to the enlarged group to support the integration process. •The process of rapidly integrating the operations of Altadis into the Imperial Tobacco Group will now commence. •The enlarged group is expected to generate cost savings of approximately €300 million per annum by the end of the second full financial year following completion (year ended September 2010), plus revenue benefits. Full access to the Altadis business will now bring greater visibility of the level and timing of the cost savings. Gareth Davis, Chief Executive Officer of Imperial Tobacco, said: "I am delighted to announce the successful conclusion of our acquisition ofAltadis. This is a significant milestone for Imperial Tobacco, consolidating ourposition as the world's fourth largest international tobacco company andenhancing our platform for continued and sustainable growth. "Geographically, we will be a more broadly based global tobacco group withenhanced positions in profitable mature markets and improved emerging marketopportunities. Our combined brand and product portfolio provides us withconsiderable international strength in cigarettes and world leadership incigars, fine cut tobacco, papers and tubes. "Coupled with the substantial cost savings that we expect to achieve, we believethis represents an excellent deal for Imperial Tobacco and one that will createsignificant value for our shareholders. "Our decision regarding Logista is consistent with our view that this is anattractive and profitable business in its own right. We believe our decision isin the best interests of our shareholders at this time and we are committed tocontinuing to run Logista on an independent and standalone basis. "I am pleased to announce that Jean-Dominique Comolli has indicated he willaccept an invitation to become non-executive Deputy Chairman of ImperialTobacco. I also look forward to welcoming two of Altadis' other non-executivedirectors onto the Imperial Tobacco Board in due course. Antonio Vazquez hasaccepted an invitation to act as a consultant to the enlarged group for at leastthe next six months. We have been in regular contact with Altadis management andlook forward to the valuable contribution of Altadis' executives and employeesto the continued success of the Imperial Tobacco Group." Completion of the Offer for Altadis The Spanish Securities and Exchange Commission, the Comision Nacional delMercado de Valores (the "CNMV") today announced the final result of ImperialTobacco Group PLC's ("Imperial Tobacco") cash offer (which offer was made by itswholly-owned subsidiary, Imperial Tobacco Overseas Holdings (3) Limited) forAltadis, S.A. ("Altadis") at €50 per share (the "Offer"). Valid acceptances were received in respect of 241,867,605 Altadis shares,representing approximately 95.81% of Altadis' total issued share capital. The80% minimum acceptance condition has therefore been satisfied, the Offer hasbecome unconditional and the takeover bid for Altadis has been successful. The settlement of the Offer consideration for the Altadis shares which have beentendered in acceptance of the Offer is expected to take place on 30 January2008. As stated in the announcement of 22 January 2008, Imperial Tobacco is entitled,and intends, to use the squeeze-out mechanism in the Spanish takeover regime tocompulsorily acquire all of the outstanding Altadis shares at a price of €50 pershare. The use of the squeeze-out mechanism will result in the delisting of theAltadis shares from the Stock Exchanges of Madrid, Barcelona, Bilbao andValencia and from Eurolist by Euronext Paris. The settlement date for thesqueeze-out is expected to be 21 February 2008; on that date Imperial Tobaccowill become the owner of all the Altadis shares and Altadis will thereafter bedelisted. Imperial Tobacco's Board of Directors intends that the rapid integration of theImperial Tobacco and Altadis businesses will now commence. Imperial Tobaccointends that: •the headquarters of the enlarged group will remain in Bristol; •the cigarette business of Altadis will be integrated into Imperial Tobacco's cigarette business; •the cigar business of Imperial Tobacco will be incorporated into Altadis' cigar business, which will remain headquartered in Madrid; •the logistics business of Altadis will also remain headquartered in Madrid; and •the enlarged group will also maintain a substantial presence in Paris. When Imperial Tobacco announced the proposed acquisition of Altadis on 18 July2007 it estimated that it would be able to generate cost savings ofapproximately €300 million per year by the end of the second full year (yearended September 2010). Imperial Tobacco estimated that approximately half of thecost savings would come through the generation of lower production andpurchasing costs and the other half would be achieved through sales andmarketing synergies and rationalisation of corporate overheads. It was estimatedthat the one-off cash cost of achieving these annual savings would be €470million. Imperial Tobacco is also expected to benefit from the disposals ofnon-core assets valued by Altadis at €650m. Now that the acquisition has been completed, Imperial Tobacco will gain fullaccess to the Altadis business, which will now bring greater visibility of thelevel and timing of the cost savings. Imperial Tobacco expects to update themarket on these estimates in due course. We anticipate providing further financial information on the enlarged ImperialTobacco Group ahead of the close period for our interim results for the sixmonths to 31 March 2008. Logista In accordance with article 7.1 of the Royal Decree 1066/2007 of 27 July relatingto the legal regime applicable to takeover bids in Spain (the "Royal Decree"),Imperial Tobacco is obliged to either file a takeover offer for the shares inCompania de Distribucion Integral Logista, S.A. ("Logista") which are notalready owned by Altadis, or reduce Altadis' shareholding in Logista to lessthan 30%, within three months from the date on which Imperial Tobacco acquirescontrol of Altadis. Altadis currently owns approximately 59.62% of the entireissued share capital of Logista (including treasury shares). For the purposes of the Royal Decree, Imperial Tobacco is treated as havingacquired control of Logista today, being the day on which the CNMV has publishedthe result of Imperial Tobacco's takeover offer for Altadis. Imperial Tobacco has decided to file a takeover offer for all of the Logistashares not already owned by Altadis before the end of the three month periodspecified above. Such an offer will be unconditional and at a price of €52.50per Logista share. This price has been determined in accordance with articles 9and 10 of the Royal Decree and is supported by a valuation report from anindependent expert valuer. The takeover offer will be made by a wholly-ownedsubsidiary of Imperial Tobacco (which may be Altadis) and will be subject to theformal authorisation of the CNMV. Notwithstanding the above, if a third party files a takeover offer for all ofthe share capital of Logista, which offer is at a price in excess of the priceoffered by Imperial Tobacco, Imperial Tobacco reserves the right to withdraw itstakeover offer for Logista and to accept that offer, in the terms provided forin the applicable legislation. The proposed offer price of €52.50 per share values the outstanding Logistashares at a total of approximately €910 million (excluding treasury shares) andvalues the entire issued share capital of Logista (excluding treasury shares) atapproximately €2,300 million. Imperial Tobacco understands there are currentlyapproximately 500,000 treasury shares. Board, Management and Employees Jean-Dominique Comolli has indicated he will accept an invitation to becomenon-executive Deputy Chairman of the Board of Imperial Tobacco. Mr Comolli hasalso accepted an invitation to provide certain consultancy services to theenlarged group. In addition it is proposed that two other non-executive directors of Altadiswill be appointed to the Board of Imperial Tobacco as non-executive directors indue course. Antonio Vazquez has decided not to accept an invitation to become executive CEOof the enlarged group's cigar and logistics businesses for personal reasons.However, Mr Vazquez has accepted an invitation to provide consultancy servicesto the enlarged group, for a period of at least six months, to support theprocess of integrating Altadis into the Imperial Tobacco Group. Imperial Tobacco will benefit from the contribution of these individuals, aswell as the contribution of all of the other Altadis executives and employeeswho will now be joining the Imperial Tobacco Group. Financing The acquisition of Altadis will be financed through new bank facilities and anunderwritten rights issue, which we currently estimate will be no more than £5billion, to be completed by 18 July 2008. The actual size of the rights issuewill be dependent upon a number of factors. The purchase of all of the minorityshares in Logista will not significantly influence the size of the rights issueand we currently estimate that it could increase by around £200 million whencompared to selling down all of Altadis' holding of 59.62% of the entire issuedshare capital of Logista. Imperial Tobacco will announce further details of the rights issue in duecourse. Anti-Trust Divestments Following approval of the acquisition of Altadis by the European Commission on18 October 2007, the process of required anti-trust divestments is underway.These disposals will not materially adversely affect the operational andfinancial performance of the enlarged group. Imperial Tobacco will keep themarket informed of any material developments in relation to this process. Ends Gareth Davis will also host the following conference calls, in which there willbe an opportunity for questions: European Newswires at 08:00am: Dial in number: +44 (0)20 7806 1968 (UK) Dial in number: +33 (0)1 70 99 43 00 (France) Dial in number: +34 91 788 9937 (Spain) Dial in number: +49 (0)69 5007 1317 (Germany) Confirmation Code - 4531106 A replay of this call will be available for one week. To listen, please dial: +44 (0)20 7806 1970 Code: 4531106 Investors and Analysts at 09:00am: Dial in number: +44 (0)20 7806 1967 Confirmation Code - 1397435 A replay of this call will be available for one week. To listen, please dial: +44 (0) 207 806 1970 Code: 1397435 European Media at 11:00am: Dial in number: +44 (0)20 7806 1968 (UK) Dial in number: +33 (0)1 70 99 43 03 (France) Dial in number: +34 91 788 9937 (Spain) Dial in number: +49 (0)69 5007 1317 (Germany) Confirmation Code - 2069488 A replay of this call will be available for one week. To listen, please dial: +44 (0) 207 806 1970 Code: 2069488 UK Media at 12:00pm: Dial in number: +44 (0)20 7138 0836 Confirmation Code - 4556187 A replay of this call will be available for one week. To listen, please dial: +44 (0)20 7806 1970 Code: 4556187# US Investors and Analysts at 14:30pm (09:30am EST) +1 718 354 1391 Confirmation Code: 1399546 A replay of this call will be available for one week. To listen, please dial: +1 718 354 1112 Code: 1399546 Enquiries Imperial TobaccoAlex Parsons (Head of Corporate Telephone: +44 (0) 7967 467241Communications)Simon Evans (Group Press Officer) Telephone: +44 (0) 7967 467684John Nelson-Smith (Investor Relations Telephone: +44 (0) 117 933 7032Manager)Nicola Tate (Investor Relations Manager) Telephone: +44 (0) 117 933 7082 Citi (lead financial adviser to Imperial Telephone: +44 (0) 20 7986 4000Tobacco)Ian Carnegie-BrownIan HartMark Todd Manuel Falco Telephone: +34 (0) 91 538 4411 Hoare Govett (joint corporate broker Telephone: +44 (0) 20 7678 8000to Imperial Tobacco)Hugo FisherPaul Nicholls Morgan Stanley (joint corporate broker Telephone: +44 (0) 20 7425 5000to Imperial Tobacco)Paul BakerAlastair Cochran Citi, Hoare Govett limited and Morgan Stanley & Co. International limited whichare authorised and regulated in the United Kingdom by the Financial ServicesAuthority, are acting exclusively for Imperial Tobacco and no one else inrelation to the matters referred to in this announcement and will not beresponsible to anyone other than Imperial Tobacco for providing the protectionsafforded to clients of Citi, Hoare Govett limited and Morgan Stanley & Co.International limited respectively nor for providing advice in relation to thesematters, the content of this announcement or any matter referred to in it. Copies of Imperial Tobacco's announcements are available on its website:www.imperial-tobacco.com The statements contained in this announcement that are not historical facts are"forward-looking" statements. These forward-looking statements are subject to anumber of risks and uncertainties, many of which are beyond Imperial Tobacco'scontrol and all of which are based on the current beliefs and expectations aboutfuture events of the directors' of Imperial Tobacco. No assurance can be giventhat such future results will be achieved. Actual events or results may differmaterially as a result of risks and uncertainties facing Imperial Tobacco andits subsidiaries. Except to the extent required by applicable law, ImperialTobacco will not necessarily update any of them in light of new information orfuture events and undertakes no duty to do so. This press release is not an offer of securities for sale in the United States.The securities of Imperial Tobacco may not be offered or sold in the UnitedStates absent registration or an exemption from registration. Any publicoffering of securities to be made in the United States will be made by means ofa prospectus that will contain detailed information about the company andmanagement, as well as financial statements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Imperial Brands