Offer Update

RNS Number:5356M
Imperial Tobacco Group PLC
25 January 2008


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO OR FROM THE UNITED
STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA.


25 January 2008


Imperial Tobacco Group PLC Announces the Final Result of its Offer for Altadis,
S.A.


Summary


   *The Spanish Securities and Exchange Commission, the CNMV, today published
    the final result of Imperial Tobacco's takeover bid for Altadis.


   *Acceptances in respect of approximately 95.81% of the Altadis shares were
    received. The 80% minimum acceptance condition has been satisfied and the
    Offer has become unconditional.


   *Imperial Tobacco now plans to use the squeeze-out process to compulsorily
    acquire all of the outstanding Altadis shares and to delist the Altadis
    shares.


   *Imperial Tobacco states its intention to launch a tender offer for the
    shares in Logista which are not already owned by Altadis at a price of
    Euro52.50 per Logista share. This values the outstanding Logista shares at a
    total of approximately Euro910 million (excluding treasury shares) and values
    the entire share capital of Logista (excluding treasury shares) at
    approximately Euro2,300 million.


   *The acquisition of Altadis will be financed through new bank facilities
    and an underwritten rights issue, which we currently estimate will be no
    more than £5 billion, to be completed by 18 July 2008.  The actual size of
    the rights issue will be dependent upon a number of factors.  The purchase
    of all of the minority shares in Logista will not significantly
    influence the size of the rights issue and we currently  estimate that it
    could increase by around £200 million when compared to selling down all of
    Altadis' holding of 59.62% of the entire issued share capital of Logista.


   *Jean-Dominique Comolli, the current Chairman of Altadis, has indicated he
    will accept an invitation to join the Board of Imperial Tobacco as
    non-executive Deputy Chairman.


   *Antonio Vazquez, the current Chief Executive Officer of Altadis, has
    decided not to accept an invitation to join the Board of Imperial Tobacco
    for personal reasons but has accepted an invitation to act as a consultant
    to the enlarged group to support the integration process.


   *The process of rapidly integrating the operations of Altadis into the
    Imperial Tobacco Group will now commence.


   *The enlarged group is expected to generate cost savings of approximately
    Euro300 million per annum by the end of the second full financial year
    following completion (year ended September 2010), plus revenue benefits.
    Full access to the Altadis business will now bring greater visibility of the
    level and timing of the cost savings.



Gareth Davis, Chief Executive Officer of Imperial Tobacco, said:


"I am delighted to announce the successful conclusion of our acquisition of
Altadis. This is a significant milestone for Imperial Tobacco, consolidating our
position as the world's fourth largest international tobacco company and
enhancing our platform for continued and sustainable growth.


"Geographically, we will be a more broadly based global tobacco group with
enhanced positions in profitable mature markets and improved emerging market
opportunities. Our combined brand and product portfolio provides us with
considerable international strength in cigarettes and world leadership in
cigars, fine cut tobacco, papers and tubes.


"Coupled with the substantial cost savings that we expect to achieve, we believe
this represents an excellent deal for Imperial Tobacco and one that will create
significant value for our shareholders.


"Our decision regarding Logista is consistent with our view that this is an
attractive and profitable business in its own right. We believe our decision is
in the best interests of our shareholders at this time and we are committed to
continuing to run Logista on an independent and standalone basis.


"I am pleased to announce that Jean-Dominique Comolli has indicated he will
accept an invitation to become non-executive Deputy Chairman of Imperial
Tobacco. I also look forward to welcoming two of Altadis' other non-executive
directors onto the Imperial Tobacco Board in due course. Antonio Vazquez has
accepted an invitation to act as a consultant to the enlarged group for at least
the next six months. We have been in regular contact with Altadis management and
look forward to the valuable contribution of Altadis' executives and employees
to the continued success of the Imperial Tobacco Group."


Completion of the Offer for Altadis


The Spanish Securities and Exchange Commission, the Comision Nacional del
Mercado de Valores (the "CNMV") today announced the final result of Imperial
Tobacco Group PLC's ("Imperial Tobacco") cash offer (which offer was made by its
wholly-owned subsidiary, Imperial Tobacco Overseas Holdings (3) Limited) for
Altadis, S.A. ("Altadis") at Euro50 per share (the "Offer").


Valid acceptances were received in respect of 241,867,605 Altadis shares,
representing approximately 95.81% of Altadis' total issued share capital. The
80% minimum acceptance condition has therefore been satisfied, the Offer has
become unconditional and the takeover bid for Altadis has been successful.


The settlement of the Offer consideration for the Altadis shares which have been
tendered in acceptance of the Offer is expected to take place on 30 January
2008.


As stated in the announcement of 22 January 2008, Imperial Tobacco is entitled,
and intends, to use the squeeze-out mechanism in the Spanish takeover regime to
compulsorily acquire all of the outstanding Altadis shares at a price of Euro50 per
share. The use of the squeeze-out mechanism will result in the delisting of the
Altadis shares from the Stock Exchanges of Madrid, Barcelona, Bilbao and
Valencia and from Eurolist by Euronext Paris. The settlement date for the
squeeze-out is expected to be 21 February 2008; on that date Imperial Tobacco
will become the owner of all the Altadis shares and Altadis will thereafter be
delisted.


Imperial Tobacco's Board of Directors intends that the rapid integration of the
Imperial Tobacco and Altadis businesses will now commence. Imperial Tobacco
intends that:


   *the headquarters of the enlarged group will remain in Bristol;


   *the cigarette business of Altadis will be integrated into Imperial
    Tobacco's cigarette business;


   *the cigar business of Imperial Tobacco will be incorporated into Altadis'
    cigar business, which will remain headquartered in Madrid;


   *the logistics business of Altadis will also remain headquartered in
    Madrid; and


   *the enlarged group will also maintain a substantial presence in Paris.


When Imperial Tobacco announced the proposed acquisition of Altadis on 18 July
2007 it estimated that it would be able to generate cost savings of
approximately Euro300 million per year by the end of the second full year (year
ended September 2010). Imperial Tobacco estimated that approximately half of the
cost savings would come through the generation of lower production and
purchasing costs and the other half would be achieved through sales and
marketing synergies and rationalisation of corporate overheads. It was estimated
that the one-off cash cost of achieving these annual savings would be Euro470
million. Imperial Tobacco is also expected to benefit from the disposals of
non-core assets valued by Altadis at Euro650m.


Now that the acquisition has been completed, Imperial Tobacco will gain full
access to the Altadis business, which will now bring greater visibility of the
level and timing of the cost savings. Imperial Tobacco expects to update the
market on these estimates in due course.


We anticipate providing further financial information on the enlarged Imperial
Tobacco Group ahead of the close period for our interim results for the six
months to 31 March 2008.



Logista


In accordance with article 7.1 of the Royal Decree 1066/2007 of 27 July relating
to the legal regime applicable to takeover bids in Spain (the "Royal Decree"),
Imperial Tobacco is obliged to either file a takeover offer for the shares in
Compania de Distribucion Integral Logista, S.A. ("Logista") which are not
already owned by Altadis, or reduce Altadis' shareholding in Logista to less
than 30%, within three months from the date on which Imperial Tobacco acquires
control of Altadis. Altadis currently owns approximately 59.62% of the entire
issued share capital of Logista (including treasury shares).


For the purposes of the Royal Decree, Imperial Tobacco is treated as having
acquired control of Logista today, being the day on which the CNMV has published
the result of Imperial Tobacco's takeover offer for Altadis.


Imperial Tobacco has decided to file a takeover offer for all of the Logista
shares not already owned by Altadis before the end of the three month period
specified above. Such an offer will be unconditional and at a price of Euro52.50
per Logista share. This price has been determined in accordance with articles 9
and 10 of the Royal Decree and is supported by a valuation report from an
independent expert valuer. The takeover offer will be made by a wholly-owned
subsidiary of Imperial Tobacco (which may be Altadis) and will be subject to the
formal authorisation of the CNMV.


Notwithstanding the above, if a third party files a takeover offer for all of
the share capital of Logista, which offer is at a price in excess of the price
offered by Imperial Tobacco, Imperial Tobacco reserves the right to withdraw its
takeover offer for Logista and to accept that offer, in the terms provided for
in the applicable legislation.


The proposed offer price of Euro52.50 per share values the outstanding Logista
shares at a total of approximately Euro910 million (excluding treasury shares) and
values the entire issued share capital of Logista (excluding treasury shares) at
approximately Euro2,300 million. Imperial Tobacco understands there are currently
approximately 500,000 treasury shares.



Board, Management and Employees


Jean-Dominique Comolli has indicated he will accept an invitation to become
non-executive Deputy Chairman of the Board of Imperial Tobacco. Mr Comolli has
also accepted an invitation to provide certain consultancy services to the
enlarged group.


In addition it is proposed that two other non-executive directors of Altadis
will be appointed to the Board of Imperial Tobacco as non-executive directors in
due course.


Antonio Vazquez has decided not to accept an invitation to become executive CEO
of the enlarged group's cigar and logistics businesses for personal reasons.
However, Mr Vazquez has accepted an invitation to provide consultancy services
to the enlarged group, for a period of at least six months, to support the
process of integrating Altadis into the Imperial Tobacco Group.


Imperial Tobacco will benefit from the contribution of these individuals, as
well as the contribution of all of the other Altadis executives and employees
who will now be joining the Imperial Tobacco Group.


Financing


The acquisition of Altadis will be financed through new bank facilities and an
underwritten rights issue, which we currently estimate will be no more than £5
billion, to be completed by 18 July 2008.  The actual size of the rights issue
will be dependent upon a number of factors.  The purchase of all of the minority
shares in Logista will not significantly influence the size of the rights issue
and we  currently  estimate that it could increase by around £200 million when
compared to selling down all of Altadis' holding of 59.62% of the entire issued
share capital of Logista.


Imperial Tobacco will announce further details of the rights issue in due
course.


Anti-Trust Divestments


Following approval of the acquisition of Altadis by the European Commission on
18 October 2007, the process of required anti-trust divestments is underway.
These disposals will not materially adversely affect the operational and
financial performance of the enlarged group. Imperial Tobacco will keep the
market informed of any material developments in relation to this process.


Ends


Gareth Davis will also host the following conference calls, in which there will
be an opportunity for questions:


European Newswires at 08:00am:

Dial in number: [phone] (UK)

Dial in number: [phone] (France)

Dial in number: [phone] (Spain)

Dial in number: [phone] (Germany)

Confirmation Code - 4531106


A replay of this call will be available for one week. To listen, please dial:

[phone]

Code: 4531106


Investors and Analysts at 09:00am:

Dial in number: [phone]

Confirmation Code - 1397435


A replay of this call will be available for one week. To listen, please dial:


[phone]

Code: 1397435


European Media at 11:00am:

Dial in number: [phone] (UK)

Dial in number: [phone] (France)

Dial in number: [phone] (Spain)

Dial in number: [phone] (Germany)

Confirmation Code - 2069488


A replay of this call will be available for one week. To listen, please dial:


[phone]

Code: 2069488


UK Media at 12:00pm:

Dial in number: [phone]

Confirmation Code - 4556187


A replay of this call will be available for one week. To listen, please dial:


[phone]

Code: 4556187#


US Investors and Analysts at 14:30pm (09:30am EST)

[phone]

Confirmation Code: 1399546


A replay of this call will be available for one week. To listen, please dial:


[phone]

Code: 1399546






Enquiries

Imperial Tobacco
Alex Parsons (Head of Corporate              Telephone: [phone]
Communications)
Simon Evans (Group Press Officer)            Telephone: [phone]
John Nelson-Smith (Investor Relations        Telephone: [phone]
Manager)
Nicola Tate (Investor Relations Manager)     Telephone: [phone]

Citi (lead financial adviser to Imperial     Telephone: [phone]
Tobacco)
Ian Carnegie-Brown
Ian Hart
Mark Todd

Manuel Falco                                 Telephone: [phone]

Hoare Govett (joint corporate broker         Telephone: [phone]
to Imperial Tobacco)
Hugo Fisher
Paul Nicholls

Morgan Stanley (joint corporate broker       Telephone: [phone]
to Imperial Tobacco)
Paul Baker
Alastair Cochran


Citi, Hoare Govett limited and Morgan Stanley & Co. International limited which
are authorised and regulated in the United Kingdom by the Financial Services
Authority, are acting exclusively for Imperial Tobacco and no one else in
relation to the matters referred to in this announcement and will not be
responsible to anyone other than Imperial Tobacco for providing the protections
afforded to clients of Citi, Hoare Govett limited and Morgan Stanley & Co.
International limited respectively nor for providing advice in relation to these
matters, the content of this announcement or any matter referred to in it.


Copies of Imperial Tobacco's announcements are available on its website:
www.imperial-tobacco.com


The statements contained in this announcement that are not historical facts are
"forward-looking" statements. These forward-looking statements are subject to a
number of risks and uncertainties, many of which are beyond Imperial Tobacco's
control and all of which are based on the current beliefs and expectations about
future events of the directors' of Imperial Tobacco. No assurance can be given
that such future results will be achieved. Actual events or results may differ
materially as a result of risks and uncertainties facing Imperial Tobacco and
its subsidiaries. Except to the extent required by applicable law, Imperial
Tobacco will not necessarily update any of them in light of new information or
future events and undertakes no duty to do so.


This press release is not an offer of securities for sale in the United States.
The securities of Imperial Tobacco may not be offered or sold in the United
States absent registration or an exemption from registration. Any public
offering of securities to be made in the United States will be made by means of
a prospectus that will contain detailed information about the company and
management, as well as financial statements.



                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
OUPUVOBRWSRAURR