Imperial Tobacco's ?5bn cash call
02:16, 2008-May-20
Imperial Tobacco today
launched one of Britain's
biggest rights issues asking shareholders for ?4.9bn to repay some of the debt
it owes following the acquisition of Altadis.
The tobacco giant,
which owns the Lambert & Butler, Davidoff and JPS
cigarettes brands, is offering
shareholders one new share at ?14.75 for every two existing shares they own.
That is a 44pc discount to the ?26.18 share price when the market closed
yesterday.
The rights issue is
fully underwritten by Hoare Govett, Morgan Stanley, Citi and Lehman Brothers.
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Imperial Tobacco had
already hinted that it would raise up to ?5bn so that it could keep up its
investment-grade credit rating following the ?12.6bn (?10m) purchase of
Altadis.
The acquisition of
Altadis, which makes Gauloises and
Glamour cigarettes, was
completed in January.
Imperial Tobacco is
also trying to buy out the remaining 40pc of Logista, a Spanish logistics
company in which Altadis owned a 59.6pc stake. It could cost the tobacco
company, which is run by chief executive Gareth Davis, around ?910m.
The rights issue comes
as some of Britain's largest
banking companies - including Royal Bank of Scotland, HBOS and Bradford & Bingley
- have gone to their shareholders to ask for extra funds amid the credit
crisis.
Some of these banks
have priced their rights issues at a substantial discount to their prevailing
share prices.
