Gallaher 2006 Profits Rise as JT Takeover Nears
British tobacco firm Gallaher Group, which is being taken over by Japan Tobacco Inc, on Friday reported a 4.9% rise in 2006 profits and said current trading is in line with expectations.
The world's fifth-largest cigarette group, whose brands include Benson & Hedges, Silk Cut and Mayfair in Britain, posted 2006 profit before tax, amortisation and exceptional items of 597 million pounds ($1.17 billion), slightly ahead of analyst consensus forecasts of 595 million pounds.
Last December, Japan Tobacco, the world's number three cigarette group, made an agreed bid for Gallaher at 11.40 pounds a share valuing the British company at 7.5 billion pounds, or 9.75 billion pounds including debt.
Gallaher will hold an extraordinary general meeting on March 9 for its shareholders to vote on the takeover, and if they vote in favour then Gallaher shares will last trade on April 17 and shares will be cancelled on April 18.
"I believe the offer from Japan Tobacco reflects Gallaher's achievements, and, subject to completion, JT will acquire a justifiably proud, highly efficient and extremely effective organisation," said Chief Executive Nigel Northridge.
Group cigarette volumes rose five percent to 182.4 billion sticks in 2006, and although operating profits from its core markets of the UK, Ireland, Austria and Sweden fell slightly by 0.3 percent for the year, there was a 2.1 percent rise in the second half.
Gallaher shares closed on Thursday at 11.30 pounds.