SPAIN. Broker Morgan Stanley yesterday said it was maintaining its “˜attractive’ view on the tobacco industry and raised its price target on Spanish/Franco tobacco house Altadis by +11% to €34.50.
Shares in Altadis closed yesterday at €32.55 on the Barcelona Stock Exchange. The tobacco company controls 34.5% of Spanish travel retailer Aldeasa, the subject of a €609 million takeover bid by an equity consortium – Spanish investment holding company Corporacion Financiera Alba and two private equity firms, Mercapital and Omega Capital – last month.
News of that bid triggered a rise in the tobacco company’s share price, which was further boosted by subsequent intense speculation that Altadis may merge with or be sold to UK rival Imperial Tobacco.
The Corporacion Financiera Alba bid values the Aldeasa shares at €29. Shares in Aldeasa closed yesterday at €30.53, broadly in line with recent performance since news of the bid broke last month. The shares peaked at €31.10 on 30 December.
Morgan Stanley also lifted its target for British American Tobacco (BAT) by +8% to 980 pence and on Gallaher by +7% to 750 pence. On Imperial Tobacco it lifted its target by +12% to 1,600 pence.
In a related story, Spanish financial newspaper Expansion yesterday reported that Fortuna, the leading cigarette brand of Altadis, regained the leadership of the Spanish domestic cigarette market last year, posting a 17.86% market share.
The report said that Fortuna had lost its top spot to Marlboro, the flagship brand of US rival Philip Morris earlier in the year. Marlboro closed the year with a market share of 17.39%.
A total of 91.36 billion cigarettes were smoked in Spain last year, -0.22% less than in 2003, Expansion reported. Cigarette retail association Anett said that sales have been dropping at a rate of -5% in recent months, as a result of intense government anti-smoking campaigns.
MORE STORIES ON ALTADIS AND ALDEASA
Altadis shares rise amid rising talk of Imperial bid – 21/12/04
Aldeasa takeover bid underlines private equity interest in upswinging market – 14/12/04
Latest update: Aldeasa ownership in the balance as investors launch shock takeover bid – 13/12/04
