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    Altadis Dumps $16B Offer From Imperial

    The new bid is still too low for the Spanish tobacco manufacturer.

    NEW YORK -- Even 12 billion euros ($16 billion) is not enough for Madrid-based Altadis SA, maker of Gauloises cigarettes, to take the takeover bid from Imperial Tobacco Group Plc.

    Altadis rejected the new bid in a regulatory filing last week, on the terms that the price was still too low for the company, reported Bloomberg News.

    Imperial's revised proposal "doesn't reflect the strategic value of the company nor the diversity of its unique assets, nor its outlook for future growth," the company stated, adding that it asked advisers to consider the "best options" for the company, its shareholders and employees, the report stated.

    This offer, for 47 euros a share, is 1.5 percent below the closing price for the company's stocks on April 5, the last day that the company's shares traded. The original offer made by Imperial, of 45 euros a share, was turned down March 16.

    The new offer "represents a full and fair price'' for Altadis, Imperial Tobacco said in a Regulatory News Service statement. The U.K. cigarette maker said in the report that combining with Altadis would be "strategically compelling and in the interests of both companies' shareholders."

    The purchase of Altadis would provide Imperial the Fortuna cigarette brand in addition to the world's biggest cigar company, the report stated. Imperial would also own the Marquise brand in Morocco, where smoking is increasing and Altadis holds the monopoly on tobacco distribution. If the bid were accepted, the takeover would result in the world's fourth-largest traded cigarette maker, according to Bloomberg News.

    "We're entering the endgame in worldwide tobacco industry consolidation,'' Andy Brough, who helps oversee about $7.6 billion at Schroder Investment Management in London, told Bloomberg News.

    "This is one of the last targets left for Imperial.''
    Analysts estimate that Imperial could cut costs through Altadis totaling as much as 225 million euros by closing redundant factories, eliminating sales staff and moving production to countries with inexpensive labor costs, including Morocco, where Altadis bought state-owned tobacco company Lehman Brothers Holdings Inc.

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