Global buyout firm CVC Capital Partners has secured financial backing via an equity bridge for a €12.8 billion ($17.2 billion) bid for Altadis, the owner of Gauloises, Gitanes and Fortuna cigarette brands.
Despite media reports saying Altadis believed the €50 a share bid could be formalised this week, a city source said it will probably come slightly later. CVC has been conducting due diligence on the company since the beginning of May.
According to a banking source, Calyon, HSBC, Socgen, RBS and Caja Madrid are providing an equity bridge for the deal, while CVC will provide 20 per cent of the capital. The buyout firm is also in talks with unnamed French and Spanish investors to take on the bridge after the bidding, she added. Caja Madrid’s involvement and the later stage investors may address Spanish government concerns about the non-Spanish nature of the bid.
Fellow European buyout firm PAI Partners left the bidding for the company earlier this month. City sources said PAI Partners abandoned the bid because of pressure exerted from the Spanish government against the non-Spanish make-up of the consortium.
Imperial Tobacco are also conducting limited due diligence with the company on the strength of its earlier €47 per share offer, although it was provided with less information than CVC reflecting its weaker offer. A spokesman for the company said it was still continuing due diligence but he could not comment further.