Altadis opens books to rival suitors

European buyout firms CVC and PAI and rival suitor Imperial Tobacco have begun due diligence of Altadis, a Franco-Spanish tobacco group with private equity in pole position to triumph.

Spanish tobacco company Altadis has opened its books to a CVC-led consortium as well as to UK tobacco company Imperial Tobacco, as due diligence begins for the €12.8 billion bid and its potential rival offer.
The consortium has been allowed full access to the books of Altadis, the owner of Gauloise, Gitanes and Fortuna cigarettes.

By contrast, Imperial Tobacco will only be given access to the limited information it asked for during the rejected €47 per share offer it made last month, installing the consortium as current favourites to land the company. This reflects the difference between Imperial’s bid and the consortium’s €50 per share offer made last week.

Altadis said in a statement the consortium’s bid “shows progress towards the real value of the company”, which has been widely interpreted as an attempt to encourage a bidding war for the company.   

It also stated it approved of the consortium’s “willingness to preserve (Altadis’) integrated business model, as well as its identity by incorporating French and Spanish investors.”

The consortium has no plans to change the structure of the company. This is in contrast to the US company’s bid, which would probably lead to a break up of the company to split it into three separate businesses.

The consortium’s bid is dependent on the acceptance of 75 percent of shareholders and an end to the 10 percent cap of voting rights in the company.

The process of due diligence is likely to take four to six weeks.

Altadis’ share price was down 1.09 percent to €50.32 at midday GMT.