Thursday, July 31, 2008

Another Canadian company goes up in smoke.

......this is becoming a bad habit

Rothmans to be swallowed by Philip Morris

42 minutes ago

TORONTO — Rothmans Inc. (TSX:ROC) has announced a deal to be taken over by Philip Morris International Inc. in a transaction that values Canada's last publicly traded cigarette company at $2 billion.

Rothmans said Thursday the offer of $30 per share in cash has been endorsed by the Toronto-headquartered company's board of directors.

The bid follows the resolution of smuggling charges against Rothmans, Benson & Hedges Inc., which is owned 60 per cent by Rothmans and 40 per cent by Philip Morris.

The offer from the maker of Marlboro cigarettes, spun off in March as a separate company from Altria Group, represents a premium of almost 15 per cent over Wednesday's closing price of $26.17 for Rothmans shares on the Toronto Stock Exchange.

Rothmans investors have also consistently reaped a hearty dividend, yielding 5.4 per cent at Wednesday's price. The company said the second-quarter dividend, normally paid in September, will be suspended while the takeover proceeds.

The transaction is conditional on acceptance by two-thirds of Rothmans stockholders, along with Competition Act and Investment Canada approval.

The deal is expected to close by the end of October, making Rothmans a wholly owned subsidiary of Philip Morris.

The Rothmans board has undertaken to pay a termination fee of $40.9 million if an outside party prevails with a better offer.

Philip Morris will pay $81.7 million to Rothmans is the offer is not completed.

Canada's other major cigarette maker, Montreal-based Imperial Tobacco, is part of the British American Tobacco conglomerate based in London.

1 comment:

Dr Mike said...

Flaherty talking to Philip Morris :

A dollar for you , no dollars for me.

Two dollars for you , no dollars for me.

My mother said that there would be days like this--why didn`t I become a Dentist like she wanted.

Dr Mike Popovich.