BAT is in talks with private equity firms over a possible bid for Altadis, reports The Times. The talks are thought to be with CVC Capital, Cinven and PAI, the French buyout group, all of which are known to be interested in all or part of Altadis’s business. BAT’s move would spark a bidding war with Imperial Tobacco, which is understood to be close to raising its £9.5bn offer for the Franco-Spanish maker of Gauloises and Gitanes. The talks are at a very early stage and it is not yet certain that BAT will proceed with a bid, sources said. Any deal would likely see BAT keep the lion’s share of Altadis’s cigarette and cigar brands, but sell its separately listed distribution business.
The news comes despite comments from Paul Adams, its chief executive, that tobacco stocks, including Altadis and Imperial, are too expensive. That was why Mr Adams chose not to make a counterbid for Gallaher, BAT’s smaller UK rival, that was snapped up for £7.5bn by Japan Tobacco this year.

This entry was posted by Gwen Robinson on Thursday, March 29th, 2007 at 5:48 and is filed under Capital markets, M&A, Private equity. Tagged with altadis, british american tobacco, cinven, cvc, gallaher, imperial tobacco, pai. Edit this entry.