Gallaher Group to Acquire Austrian Republic's 41.13 Per Cent. Shareholding in Austria Tabak For Euro 769 Million - Pound469 Million -.Business Editors LONDON--(BUSINESS WIRE)--June 22, 2001 Gallaher Group Gallaher Group is a major British based multinational tobacco company. It was traded on the London Stock Exchange and was a constituent of the FTSE 100 Index prior to its April 2007 acquisition by Japan Tobacco. Plc (NYSE NYSE See: New York Stock Exchange : GLH GLH Gallaher Group PLC (stock symbol) GLH guided learning hours (education) GLH Goes Like Hell GLH Green Leafhopper GLH Girl Love Handles GLH Ground Launched Hellfire (missile) ), the leading tobacco company for the UK market, today announced it will acquire Austrian Republic's 41.13 per cent. shareholding in Austria Austria (ô`strēə), Ger. Österreich [eastern march], officially Republic of Austria, federal republic (2005 est. pop. 8,185,000), 32,374 sq mi (83,849 sq km), central Europe. Tabak for Euro 769 million ((pound)469 million). SUMMARY - The Gallaher Group has conditionally agreed to acquire the 41.13 per cent. shareholding held by the Austrian Republic through OIAG in Austria Tabak, a major European manufacturer of tobacco products and distributor of tobacco and other products. - Gallaher will pay Euro 85 in cash for each of the 9,049,681 Austria Tabak Shares held by OIAG, valuing OIAG's shares in Austria Tabak at Euro 769 million ((pound)469 million). - Completion of the initial purchase of Austria Tabak Shares will trigger an obligation to make a cash offer for the remaining 58.87 per cent. On the basis of the price of Euro 85 per share being paid to OIAG, Austria Tabak is valued at a total of Euro 1,870 million ((pound)1,141 million). - Gallaher will acquire leading positions in two strategically important European markets, Austria and Sweden. - The Enlarged Group will have a strong market presence and distribution expertise in Europe and the CIS. - The Transaction will further strengthen Gallaher, building upon the purchase of Liggett-Ducat. - Gallaher has arranged finance for the Transaction by way of new debt facilities, some (pound)150 million of which Gallaher intends to refinance through an issue of new Gallaher Shares. - The acquisition of Austria Tabak is expected to significantly enhance earnings per share stated before deducting amortisation, and the return on investment is expected to exceed Gallaher's cost of capital, in the first full year. - The Transaction is conditional, inter alia, on the approval of Gallaher's shareholders Nigel Nigel is a masculine name of English origin and is another form of the name Neil, which is more commonly used. The origin of the name is unusual, as it comes from the form medieval scribes writing in Latin used to "translate" Neil, and the "g" in the name comes from Northridge Northridge is the name of some places in the United States of America:
"Today marks a further step in the implementation of our international strategy, considerably strengthening our platform for growth. The acquisition of Austria Tabak will represent the second transforming deal for Gallaher, after our purchase of Liggett-Ducat last year. It will be significantly earnings enhancing in the first full year and will provide us with a greater presence across the whole of Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). ."Heinz Schiendl, Member of the Executive Board of Austria Tabak, said: "The Executive Board of Austria Tabak welcomes the proposed acquisition by Gallaher of OIAG's 41.13 per cent. shareholding in Austria Tabak and looks forward to working with Gallaher in developing the combined businesses of Gallaher and Austria Tabak." This summary should be read in conjunction with the full text of the announcement set out below. Dresdner Kleinwort Dresdner Kleinwort (DKIB) is the investment bank of Dresdner Bank AG, part of Allianz since July 2001. Headquartered in London and Frankfurt and with an international network including offices in the financial centres of New York and Tokyo, Dresdner Kleinwort provides a wide range Wasserstein Was·ser·stein , Wendy Born 1950. American playwright noted for her comedies, such as The Heidi Chronicles (1988), for which she won a Pulitzer Prize. and Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. International which are regulated in the United Kingdom by the Securities and Futures Authority Limited are acting exclusively for Gallaher in connection with the Acquisition and for no-one no-one or no one pron no person; nobody USAGE: See at everyone. else and will not be responsible to anyone other than Gallaher for providing the protections afforded to customers of Dresdner Kleinwort Wasserstein and Goldman Sachs International nor for providing advice in relation to the Acquisition. This announcement is not an offer of securities for sale in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Any securities offered by the Company will be offered in the United States only pursuant to an effective registration statement under the US Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. (the "Securities Act"), or an exemption from the registration requirements of the Securities Act. This announcement includes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the US Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding Gallaher's future financial position, strategy, projected costs and plans, and objectives of management for future operations. Although Gallaher believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors could cause actual results to differ materially from Gallaher's expectations including, without limitation, changes in general economic conditions, regulatory developments, difficulty in integrating operations following completion of the Transaction, the uncertainties of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and production or distribution disruptions, changes in consumers' patterns in the Enlarged Group's market, renegotiation of licences and contracts as well as other uncertainties detailed from time to time in Gallaher's filings with the US Securities and Exchange Commission. Neither this document nor any copy of it may be taken, transmitted or distributed, directly or indirectly, into Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. or Japan. Any failure to comply with this restriction may constitute a violation of Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. , Australian Australian pertaining to or originating in Australia. Australian bat lyssavirus disease see Australian bat lyssavirus disease. Australian cattle dog a medium-sized, compact working dog used for control of cattle. or Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and securities laws. Gallaher Group to Acquire Austrian Republic's 41.13 Per Cent. Shareholding in Austria Tabak for Euro 769 Million ((Pound)469 Million) 1. Introduction The Board of Gallaher announces that it has signed an agreement for the Gallaher Group to acquire the 41.13 per cent. shareholding held by the Austrian Republic through OIAG OIAG Osterreichische Industrieholding AG (German: Austrian Privatization Agency) in Austria Tabak, a major European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. manufacturer of tobacco products and distributor of tobacco and other products. Under the terms of the Agreement, Euro 85 is payable in cash for each of the 9,049,681 Austria Tabak Shares held by OIAG, valuing OIAG's 41.13 per cent. shareholding in Austria Tabak at Euro 769 million ((pound)469 million). Completion of the acquisition of OIAG's 41.13 per cent. stake in Austria Tabak will require Gallaher to make an unconditional HEIR, UNCONDITIONAL. A term used in the civil law, adopted by the Civil Code of Louisiana. Unconditional heirs are those who inherit without any reservation, or without making an inventory, whether their acceptance be express or tacit. Civ. Code of Lo. art. 878. UNCONDITIONAL. cash offer for the remaining shares in Austria Tabak not already owned by Gallaher. Gallaher intends that the Offer will be at the same price as that paid to OIAG for its shares. This would value the entire issued share capital of Austria Tabak, including the OIAG holding, at Euro 1,870 million ((pound)1,141 million). 2. Information on Austria Tabak Austria Tabak is a major European manufacturer and distributor of tobacco and other products, headquartered in Vienna Vienna, city and province, Austria Vienna (vēĕn`ə), Ger. Wien, city and province (1991 pop. 1,539,848), 160 sq mi (414 sq km), capital and largest city of Austria and administrative seat of Lower Austria, NE Austria, on , Austria. Austria Tabak's activities are separated into its Manufacturing Division and Wholesale Division. The Manufacturing Division The Manufacturing Division, comprising the manufacture and marketing of tobacco products, operates from four production sites in Austria, located in Linz Linz (lĭnts), city (1991 pop. 203,044), capital of Upper Austria, NW Austria, a major port on the Danube River. It is a commercial and industrial center and a rail junction. , Hainburg Hainburg may refer to the following places:
See: Earnings Before Interest and Taxes EBIT See earnings before interest and taxes (EBIT). of ATS 1,726 million on sales of 29.7 billion cigarettes of which 5.4 billion were licensed brands and 7.2 billion were sold in Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , including generic brands. In addition, the Manufacturing Division manufactured 2.3 billion cigarettes under contract manufacturing agreements of which 2.0 billion cigarettes were manufactured in Sweden. Austria Tabak is the market leader in Austria where sales of cigarettes in 2000 were approximately 15.4 billion cigarettes. Austria Tabak brands had a market share of approximately 53 per cent. in 2000, the majority of which was accounted for by the two main brands, Memphis and Milde Sorte. Including the sale of 21 licensed brands for manufacturers such as Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. Morris, BAT, JTI JTI Japan Tobacco International JTI Jaan Tonisson Institute JTI Justice Teaching Institute JTI Joint Technology Initiative JTI Joint Training Institute JTI Job Training Initiative (EPA) JTI Joint TCIM Interface and Reemtsma Reemtsma is one of the biggest tobacco and cigarette producers in Europe. It is a subsidiary of Imperial Tobacco. History Reemtsma was created in 1910 in Erfurt, Germany. In 1918, the production was automated. In 1921, the trade mark "R6" was introduced in the market. , Austria Tabak accounted for approximately 88 per cent. of the Austrian cigarette market in 2000. Austria Tabak is also the market leader in Sweden where sales of cigarettes in 2000 were approximately 7.1 billion cigarettes. Austria Tabak's brands, including Blend and Right, had a market share of approximately 40 per cent. in 2000. The leading brand of cigarettes in Sweden is Prince, with around 30 per cent. of the market, which is manufactured for the Swedish market by Austria Tabak on a subcontract sub·con·tract n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts basis. A number of Austria Tabak's manufacturing licences and sub-contracts are subject to change-of-control provisions and possible termination. The Board of Gallaher is confident that the majority of these licences and contracts can be renegotiated and will be retained by the Enlarged Group. In Germany, where the sales of cigarettes were approximately 140 billion cigarettes in 2000, the Austria Tabak Group is primarily engaged in the growing generics segment. In 2000, when generics accounted for approximately 11.8 per cent. of the total cigarettes sold in Germany, Austria Tabak was the leading player in this segment. In addition, Austria Tabak exports its products to over 40 countries. Key export markets for Austria Tabak include West and East Africa, South-Eastern Europe, Estonia Estonia (ĕstō`nēə), Estonian Eesti, officially Republic of Estonia, republic (2005 est. pop. 1,333,000), 17,413 sq mi (45,100 sq km). , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. , Greece Greece, Gr. Hellas or Ellas, republic (2005 est. pop. 10,668,000), 50,944 sq mi (131,945 sq km), SE Europe. It occupies the southernmost part of the Balkan Peninsula and borders on the Ionian Sea in the west, on the Mediterranean Sea in the south, on and the CIS countries There are two lists concerning CIS countries:
The Wholesale Division The Wholesale Division is the leading distributor of tobacco products in Austria, Germany, Hungary Hungary, Hung. Magyarország, officially Republic of Hungary, republic (2005 est. pop. 10,007,000), 35,919 sq mi (93,030 sq km), central Europe. and Estonia. This success is founded on the Division's neutrality, providing other tobacco manufacturers with open access to these markets. The Wholesale Division reported sales revenues of ATS 40,882 million and EBIT of ATS 1,082 million in 2000. In Austria, Austria Tabak is the only cigarette wholesaler and is also a leading distributor of other tobacco products, supplying all licensed tobacconists and tobacco outlets, amounting to approximately 8,500 stores. Austria Tabak is also a distributor for a range of non-tobacco products and services to the Austrian tobacconist network, including pre-pay mobile phone cards and motorway toll passes. Austria Tabak's service range also includes leasing of vending machines vending machine, coin-operated, automatic device for selling goods. Many vending machines are capable of making change, and some of the more sophisticated ones accept paper money or credit cards. to tobacconists and advertising and marketing activities for the tobacco industry. Tobaccoland Automatengesellschaft, in which Austria Tabak owns a 63.9 per cent. shareholding, is the largest tobacco vending machine operator in Germany, with approximately 220,000 cigarette vending machines out of approximately 830,000 in total. Tobaccoland Automatengesellschaft generates revenue from `placement' fees from tobacco manufacturers, in addition to the retail margin it generates on the sale of tobacco. In addition to its tobacco vending business, Tobaccoland Automatengesellschaft has recently begun a roll-out of a food and beverage F&B is a common abbreviation in the United States and Commonwealth countries, including Hong Kong. F&B is typically the widely accepted abbreviation for "Food and Beverage," which is the sector/industry that specializes in the conceptualization, the making of, and delivery of foods. vending business. In the first quarter unaudited results for the three month period ended 31 March 2001, Austria Tabak reported a 9.9 per cent. fall in the revenues from the vending machine business, which Austria Tabak attributed to the changeover (programming) changeover - The time when a new system has been tested successfully and replaces the old system. to DEM See digital elevation model. 6 packs of cigarettes from DEM 5 packs. The Executive Board of Austria Tabak believes that the German vending business is now recovering from this low point. Through its 25.1 per cent. interest in Lekkerland-Tobaccoland, Austria Tabak is the largest single shareholder in one of the strongest wholesale organizations in the convenience business in Germany supplying a range of tobacco products, convenience food such as snacks, and non-food products, such as telephone cards to a wide range of convenience stores The following is a list of convenience stores organized by geographical location. Stores are grouped by the lowest heading that contains all locales in which the brands have significant presence. in Germany. The Wholesale Division's interests in Estonia and Hungary give Austria Tabak representation in potential growth markets, particularly in Estonia, where Austria Tabak holds the distribution rights for all Phillip Phillip is a variant of the name Philip. It may refer to: Given name:
At 31 December December: see month. 2000, Austria Tabak employed a total of 3,716 individuals. 3. Reasons for the Transaction Gallaher's strategy is to maintain its strong market positions in the UK and the Republic of Ireland Ireland, Irish Eire (âr`ə) [to it are related the poetic Erin and perhaps the Latin Hibernia], island, 32,598 sq mi (84,429 sq km), second largest of the British Isles. while developing a portfolio of interests in established and emerging international markets, either organically or through strategic alliances or acquisitions. Gallaher believes that the Transaction represents an exciting opportunity to consolidate Gallaher's strength in Europe, give greater international coverage and enhance its brand portfolio. On completion of the Transaction, Gallaher will represent the fourth largest cigarette manufacturer in Western Europe Western Europe The countries of western Europe, especially those that are allied with the United States and Canada in the North Atlantic Treaty Organization (established 1949 and usually known as NATO). after Philip Morris, BAT and Altadis Altadis S.A., (IBEX-35:ALT) is a multinational purveyor and manufacturer of cigarettes, tobacco and cigars. Altadis is the result of a 1999 merger between Tabacalera, the former Spanish tobacco monopoly and SEITA, the former French tobacco monopoly. , selling a pro-forma combined volume of approximately 57 billion units in Western Europe in 2000 - part of a worldwide pro-forma total for the Enlarged Group of approximately 120 billion units. Gallaher will acquire leading positions in two strategically important European markets, Austria and Sweden. The Board of Gallaher considers that Austria Tabak's strong position in these markets offers Gallaher attractive opportunities to apply its proven skills in maximizing profits in mature markets. The Transaction will strengthen Gallaher's platform for further growth. Building on the acquisition of Liggett-Ducat, the acquisition of Austria Tabak will bring the benefits of both scale and geographic reach which Gallaher will enjoy across Europe and the CIS Cis (sĭs), same as Kish (1.) (1) (CompuServe Information Service) See CompuServe. (2) (Card Information S . In particular, the Enlarged Group will be well placed to seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. growth opportunities in Central and Eastern Europe The term "Central and Eastern Europe" came into wide spread use, replacing "Eastern bloc", to describe former Communist countries in Europe, after the collapse of the Iron Curtain in 1989/90. . In addition, Gallaher's brand portfolio will be reinforced by that of Austria Tabak which comprises primarily American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of blend brands, providing the Enlarged Group with a broad offering in existing and new markets. The Transaction will also provide Gallaher with access to proven distribution skills in a wide range of markets. As Gallaher identifies new market opportunities, where distribution skills are important, Austria Tabak's skills in more mature markets will complement Liggett-Ducat's expertise in emerging markets. In addition, cost savings are expected to arise from the combination of the businesses of Austria Tabak and Gallaher, principally in the areas of administration and purchasing. Austria Tabak is headed by a strong senior management team with many years of experience in tobacco manufacturing and wholesaling. Gallaher believes that the Enlarged Group will benefit from their expertise and long-standing relationships in the industry. 4. Summary financial information on Austria Tabak The following audited consolidated financial information for the two years ended 31 December 2000 has been extracted without material adjustment from the audited financial statements of Austria Tabak prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with International Accounting Standards.
Year ended 31 December
1999 2000
ATS(m) ATS(m)
------- -------
Sales 47,050 51,397
EBITDA 3,439 3,982
EBITA 2,753 3,292
Operating profit(1) 2,280 2,686
PBT(1) 2,270 2,662
Net profits(1) 1,289 1,301
Year ended 31 December
1999 2000
Euro (m) Euro (m)
------- --------
Sales 3,419 3,735
EBITDA 250 289
EBITA 200 239
Operating profit(1) 166 195
PBT(1) 165 193
Net profits(1) 94 95
(1) Stated after deduction of amortisation
Approximately 53 per cent. of Austria Tabak's EBITDA in 2000 was
attributable to the Manufacturing Division and approximately 47 per
cent. to the Wholesale Division.
Austria Tabak's net assets at 31 December 2000 were approximately
ATS 8,156 million (Euro 598 million) (1999: ATS 7,532 million
(Euro 547 million)) and net borrowings were ATS 4,815 million
(Euro 350 million) (1999: ATS 6,555 million (Euro 476 million)).
Austria Tabak's first quarter unaudited results for the three
months ended 31 March 2001 were as follows:
Three months ended 31 March
2000 2001
ATS(m) ATS(m)
------- -------
Sales 11,911 12,326
EBITDA 940 868
Operating profit(1) 620 552
PBT(1) 574 527
Net profit(1) 292 293
Three months ended 31 March
2000 2001
Euro (m) Euro (m)
------- --------
Sales 866 896
EBITDA 68 63
Operating profit(1) 45 40
PBT(1) 42 38
Net profit(1) 21 21
(1) Stated after deduction of amortisation
Austria Tabak's unaudited net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. at 31 March 2001 were approximately ATS 8,438 million (Euro 613 million) (2000: ATS 7,819 million (Euro 568 million)) and net borrowings were ATS 3,636 (Euro 264 million) (2000: ATS 5,528 million (Euro 402 million)). Since that date, Austria Tabak has paid the annual dividend in respect of 2000 to its shareholders, amounting to a total of ATS 757 million (Euro 55 million). 5. Financing of the Transaction The total consideration for the Transaction is expected to be Euro 1,870 million ((pound)1,141 million). In addition, Gallaher will assume Austria Tabak's indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . Gallaher has arranged finance for the Transaction, and to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. certain of Austria Tabak's existing borrowings, by way of new debt facilities to be arranged by Dresdner Kleinwort Wasserstein, Goldman Sachs International, Barclays Capital Barclays Capital is the investment banking division of Barclays plc. It is a primary dealer in U.S. Treasury securities and various European Government bonds. Barclays Capital is led by CEO Robert (Bob) Diamond, an American who had been vice-chairman of Credit Suisse First and HSBC HSBC Hongkong and Shanghai Banking Corporation HSBC Humane Society of Broward County (Florida) HSBC Humane Society of Bay County (Bay County, Michigan) Investment Bank. In addition these banks are providing a new revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility to refinance Gallaher's existing bank credit facility, finance transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). and provide working capital to the Enlarged Group. Gallaher intends to refinance some (pound)150 million of its initial debt funding through an issue of new Gallaher Shares. 6. Financial effects of the Transaction Based on a total price for the acquisition of 100 per cent. of the issued share capital of Austria Tabak of Euro 1,870 million ((pound)1,141 million) and the planned equity issue referred to above, the Board of Gallaher expects that the acquisition of Austria Tabak will, before synergies, substantially enhance Gallaher's earnings per share (stated before deducting amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. ), and that the return on investment will exceed Gallaher's cost of capital, in the first full year of operation of the Enlarged Group. 7. Principal terms of the Agreement Under the Agreement, the Gallaher Group has agreed to acquire 9,049,681 shares in Austria Tabak from OIAG (totalling 41.13 per cent. of the issued share capital of Austria Tabak) for a total cash consideration of Euro 769 million ((pound)469 million) payable in full in cash on completion. The Agreement contains undertakings from Gallaher that, in the period from completion until 31 December 2004, it will, so far as is possible and subject to market conditions, maintain the current Austria Tabak employment levels in Austria, retain the name "Austria Tabak" and continue the existing activities of Austria Tabak, including in particular maintaining neutrality in wholesale operations. The Agreement is conditional upon, inter alia [Latin, Among other things.] A phrase used in Pleading to designate that a particular statute set out therein is only a part of the statute that is relevant to the facts of the lawsuit and not the entire statute. , (a) the approval of Gallaher shareholders at an Extraordinary General Meeting of Gallaher, (b) merger clearance approval being obtained from the relevant authorities in Austria, Germany and Ireland and (c) certain modifications to the articles of association of Austria Tabak being passed at an Austria Tabak Shareholders meeting (effectively to remove certain voting limitations attaching to holdings of more than 25 per cent. of the share capital of Austria Tabak). OIAG has agreed to exercise its voting rights Voting rights The right to vote on matters that are put to a vote of security holders. For example the right to vote for directors. voting rights The type of voting and the amount of control held by the owners of a class of stock. (which are limited as described above) in favour of the resolution to modify the articles of association of Austria Tabak. Assuming satisfaction of these conditions, completion of the Acquisition is expected to take place by early September 2001. 8. Details of the Offer Completion of the acquisition of OIAG's 41.13 per cent. shareholding in Austria Tabak will give Gallaher a controlling shareholding in Austria Tabak for the purposes of the regulations set out in the Austrian Takeover Act. Under the provisions of the Austrian Takeover Act, in conjunction with Austria Tabak's Articles of Association, this will result in Gallaher being required to make an unconditional cash offer for all of the issued share capital of Austria Tabak not then owned by Gallaher at a price per Austria Tabak Share no lower than that paid to OIAG and the average market price of Austria Tabak Shares for the six month period prior to completion of the Acquisition. 9. Statement of the Executive Board of Austria Tabak The Executive Board of Austria Tabak has today issued the following statement in respect of the Transaction: "The Executive Board of Austria Tabak welcomes the proposed acquisition by Gallaher of OIAG's 41.13 per cent. shareholding in Austria Tabak. We understand that, following fulfilment ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. of all conditions precedent and completion of the Acquisition, Gallaher intends to make a cash offer to all other shareholders of Austria Tabak to acquire their shares at the same price per share as that paid to OIAG (Euro 85 per share), which may result in Gallaher acquiring the whole of the issued share capital of Austria Tabak. While the Executive Board of Austria Tabak will respond to Gallaher's Offer when it is made in accordance with the Austrian Takeover Act, the Executive Board of Austria Tabak, at this stage, believes that this price fairly reflects the value of Austria Tabak and looks forward to working with Gallaher in developing the combined businesses of Gallaher and Austria Tabak." 10. Current trading of Gallaher Gallaher's current trading remains in line with management and market expectations. The Group continues to realize the benefits of its strong market positions in the UK and the Republic of Ireland, and to grow organically its operations in Western Europe and further afield. The integration of Liggett-Ducat has now been largely completed, and its business is growing in line with management expectations. The Directors of Gallaher believe that Gallaher's prospects will be enhanced by the Transaction and are confident of the outlook for the Enlarged Group. 11. Extraordinary General Meeting of Gallaher In accordance with the Listing Rules, the Transaction requires the approval of Shareholders. An Extraordinary General Meeting of Gallaher is to be held at which an ordinary resolution will be proposed to approve the Transaction. Notice of the Extraordinary General Meeting will be set out in a circular to Shareholders to be despatched as soon as practicable practicable adj. when something can be done or performed. .
Enquiries:
Claire Jenkins Head of Investor Relations 01932 859 777
Anthony Cardew Cardew & Co 020 7930 0777
Jon Simmons
Henry Somerset Dresdner Kleinwort Wasserstein 020 7623 8000
Natalie Blyth (Joint financial adviser and
corporate broker to
David Hutchison Gallaher)
Angus Kerr
Lorenzo Grabau Goldman Sachs International 020 7774 1000
Scott Bell (Joint financial adviser to Gallaher)
Phil Raper
Dresdner Kleinwort Wasserstein and Goldman Sachs International which are regulated in the United Kingdom by The Securities and Futures Authority Limited are acting exclusively for Gallaher in connection with the Acquisition and for no-one else and will not be responsible to anyone other than Gallaher for providing the protections afforded to customers of Dresdner Kleinwort Wasserstein and Goldman Sachs International nor for providing advice in relation to the Acquisition. This announcement is not an offer of securities for sale in the United States. Any securities by the Company will be offered in the United States only pursuant to an effective registration statement under the US Securities Act of 1933, as amended (the "Securities Act"), or an exemption from the registration requirements of the Securities Act. This announcement includes forward-looking statements within the meaning of Section 27A of the US Securities Exchange Act of 1934, as amended, including, without limitation, statements regarding Gallaher's future financial position, strategy, projected costs and plans, and objectives of management for future operations. Although Gallaher believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Important factors could cause actual results to differ materially from Gallaher's expectations including, without limitation, changes in general economic conditions, regulatory developments, difficulty in integrating operations following completion of the Transaction, the uncertainties of litigation and production or distribution disruptions, changes in consumers' patterns in the Enlarged Group's market, renegotiation of licences and contracts as well as other uncertainties detailed from time to time in Gallaher's filings with the US Securities and Exchange Commission. Neither this document nor any copy of it may be taken, transmitted or distributed, directly or indirectly, into Canada, Australia or Japan. Any failure to comply with this restriction may constitute a violation of Canadian, Australian or Japanese securities laws. The following definitions apply throughout this announcement unless the context otherwise requires:
"Acquisition" the proposed acquisition of 41.13 per
cent. of the issued share capital of
Austria Tabak as described in this
announcement
"Agreement" the agreement relating to the
acquisition of 41.13 per cent. of
Austria Tabak as summarized in this
announcement
"Altadis" Altadis S.A.
"ATS" Austrian Schillings
"Austria Tabak" Austria Tabak Aktiengesellschaft
"Austria Tabak Group" Austria Tabak and its subsidiaries
"Austria Tabak Shareholder" a holder of Austria Tabak Shares
"Austria Tabak Shares" no par value shares in Austria Tabak
"Austrian Takeover Act" the Takeover Act 1999 which is the key
source of regulation for Austrian
takeovers, supplemented by regulations
issued by the Austrian Takeover
Commission
"Barclays Capital" Barclays Capital, the investment
banking division of
Barclays Bank PLC
"BAT" British American Tobacco Plc
"Board" or "Directors" the Directors of Gallaher Group Plc
"CIS" the Commonwealth of Independent States
"DEM" Deutsche Mark
"Dresdner Kleinwort Wasserstein" Dresdner Kleinwort Wasserstein Limited
or Dresdner leinwort Wasserstein
Securities Limited, as the context
requires
"EGM" or "Extraordinary
General Meeting" the extraordinary general meeting of
the Company to be convened at a future
date to be notified to Shareholders
"Enlarged Group" Gallaher Group as enlarged by the
acquisition of the Austria Tabak Group
"Gallaher" or the "Company" Gallaher Group Plc
"Gallaher Group" or the "Group" Gallaher Group Plc and its
subsidiaries (excluding the Austria
Tabak Group)
"HSBC Investment Bank" HSBC Investment Bank plc
"Hungarotabak-Tobaccoland" Hungarotabak-Tobaccoland Rt,
Budapest, Hungary
"JTI" Japan Tobacco Inc.
"Lekkerland-Tobaccoland" Lekkerland-Tobaccoland GmbH & Co KG,
Frechen, Germany
"Listing Rules" the Listing Rules of the UK Listing
Authority
"Manufacturing Division" the cigarette manufacturing division
of Austria Tabak
"Offer" the mandatory offer for the remaining
shares in Austria Tabak not already
owned by Gallaher following completion
of the Agreement, which will be
required under the Austrian Takeover
Act upon completion of the Agreement
"OIAG" Osterreichische Industrieholding
Aktiengesellschaft,
Vienna, Austria
"Philip Morris" Philip Morris Companies Inc.
"Reemtsma" Reemtsma Cigarettenfabriken GmbH
"Shareholder" a registered holder of Shares
"Shares" ordinary shares of 10 pence each in
Gallaher Group Plc
"Tobaccoland
Automatengesellschaft" Tobaccoland Automatengesellschaft mbH
& Co. KG, Monchengladbach, Germany
"Tobaccoland Estonia" Tobaccoland Eesti AS, Talinn, Estonia
"Transaction" together the Acquisition and Offer
"UK" the United Kingdom of Great Britain
and Northern Ireland
"UK Listing Authority" the Financial Services Authority in
its capacity as competent authority
under Part IV of the Financial
Services Act 1986
"Wholesale Division" the wholesale division of Austria Tabak
Throughout this document the following exchange rates, being those prevailing at close of business on 21 June 2001, have been used: (pound)0.61 = Euro 1 ATS 13.7603 = Euro 1 |
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