Altadis, the Franco-Spanish tobacco group, opened its books on Tuesday to Imperial Tobacco and a CVC-led consortium -– raising hopes of a bidding war, the FT reports.
The Altadis board said a €50-per-share preliminary offer from CVC and PAI, the private equity groups, which valued the company at more than $17.4bn, was “closer to the company’s real value” than Imperial’s €47 approach last month. The tobacco group’s decision to authorise the “due diligence” examination of its accounts and business by both groups but not to formally back either offer could trigger the bidding war it has been hoping for.
However, Altadis said it would only give Imperial access to the financial information it had asked for, compared with CVC, which would have access to all Altadis’s books.
People close to the situation said: “Shareholders want this deal to be a level playing field. Altadis will have to give both parties the same information.”
However, the CVC-led offer is likely to remain the favourite, unless Imperial improves its bid.
Although price remains an important consideration, key Altadis directors and senior managers are known to favour a sale to, or management buy-out, backed by private equity because they would keep their jobs. CVC has no plans to break up Altadis, in spite of its three distinct business divisions. Analysts expect Imperial to increase its bid.
The CVC consortium, which is being advised by Goldman Sachs and Lazard, has lined up financing from Goldman Sachs, SocGen, Calyon and BNP. Its success is contingent on acceptances from 75 per cent of shareholders, and the ending of a 10 per cent cap on voting rights at the group.
Citigroup, Hoare Govett and Morgan Stanley are advising Imperial. Altadis has hired Merrill Lynch, Credit Suisse, JPMorgan Chase and NM Rothschild.