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UPDATE 1-British American Tobacco to be dropped from JSE Top-40 

British American Tobacco (BAT) will be dropped from the JSE Top-40 Index of blue-chips from Nov 17, the Johannesburg Securities Exchange said on Thursday.

"The reason for that is BAT is an inward foreign listing classified by the reserve bank. So, as such we don't include it in the indexes," Jannie lmmelman, JSE's general manager for information systems, told Reuters.

"However to make sure that portfoilio managers can balance to their portfolios we included BAT for a short period until Reinet rights (issue) have been soughted out."

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Times are tough, but the rich can still splash out 

It will be interesting to see how much local pension funds will move to increase stakes in British American Tobacco (BAT) now that they can hold the share directly, instead of diluting it with Richemont's luxury interests, or Remgro's banking and other interests.

BAT offers steady sales, global geographic diversity and earnings in pounds - just about everything a fund could want in uncertain times, unless, of course, holding tobacco is against the ethical rules of a fund. But there are risks cigarette companies face, including litigation over health, as has been seen previously.

Sales are also down in the West, proving that high government sin taxes, regulation of smoking and banning of advertising do cut demand. . . .

In this country, BAT has responded to the advertising restrictions by changing the packaging on cigarette boxes. The change is a gradual evolution and creates a talking point among smokers about a brand. It is believed that innovation of the actual cigarette product is the next step in marketing: expect fags that change taste midway through a smoke. . . .

Long-term family investments in tobacco companies such as BAT and Philip Morris International may help put many children and grandchildren through tertiary education, but one wonders if cigarette companies will still be a top investment choice when the next generation goes through its recession.

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Richemont: Reinet Distributes 90% Of BAT Stake To Holders 

Luxury goods maker Compagnie Financiere Richemont S.A. ( CFR.VX) Monday announced further steps tied to the ongoing spin-off of the minority stake in British American Tobacco Plc (BTI).

Luxembourg-based Reinet Investments SCA, a fund set up under the spin-off transaction, will distribute 90% of its interest in to its shareholders and holders of Reinet Investments depositary receipts.

The distribution is against the cancellation of 86.3% of shareholders' and DR holders' interests in Reinet.

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BAT slumps after share spin-off  

Tobacco group BAT has ended as the day's biggest FTSE 100 faller, following the spin off of a 30% stake in the company previously held by Swiss luxury group Richemont and South Africa's Remgro.

The bulk of the shares - around 90% - will be distributed to Richemont and Remgro shareholders at the beginning of November, and the rest will be held in a new investment vehicle called Reinet, which began trading for the first time today.

There have been concerns about the effect on BAT if the new holders of the shares decide to sell them in the market, while Reinet could well want to diversify its assets at some future point.

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Richemont Trades as Luxury Company After Spinoff (Update3)  

Cie. Financiere Richemont SA, the world's largest jewelry maker, traded for the first day as a standalone luxury company after spinning off tobacco and technology investments.

Richemont, the maker of Cartier necklaces and Vacheron Constantin watches closed at 25.90 Swiss francs today in Zurich trading. Shareholders this morning received one share in Reinet Investments SCA for each of their Richemont shares. Reinet began trading at 13.25 euros in Luxembourg.

Richemont traded above the median estimate of eight analysts for the shares to be valued at 20 francs, excluding Reinet. The spinoff makes Richemont more attractive to investors who want a ``pure'' luxury company without a stake in British American Tobacco Plc, the maker of Lucky Strike cigarettes, Rogerio Fujimori, an analyst at Credit Suisse, wrote yesterday.

``This is a clear thumbs-up to the transaction,''

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Richemont soars after BAT tobacco spin-off  

Shares in Switzerland's Richemont surged on Tuesday as markets welcomed the group's first trading day as a pure luxury play following the spin off of its stake in British American Tobacco.

Shares in the new Richemont, which is now Europe's second-biggest luxury goods specialist, soared 37 percent to 25.58 Swiss francs when compared with a pro-forma closing price of 18.73 francs.

Richemont reached this closing price through a calculation for its luxury component excluding BAT.

"It is clear that the strategy has been a success," Kepler Capital Markets analyst Jon Cox said.

Ninety percent of the BAT stake will be distributed to shareholders at the beginning of November and the rest will be held in new investment vehicle Reinet Investments.

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• Richemont Investors Approve BAT Spinoff, Split in Two (Update1)  

Cie. Financiere Richemont SA investors backed a plan for the company to spin off its British American Tobacco Plc stake and split in two.

Shareholders voted in favor of the split today at a meeting in Geneva, where Richemont, the world's second-biggest luxury- goods maker, is based. The company, controlled by South Africa's billionaire Rupert family, will separate to create a pure luxury business and an investment unit called Reinet.

The family is spinning off the BAT shares before Luxembourg imposes a tax, and is forming Reinet in anticipation of what Richemont Chairman Johann Rupert has said may be ``once-in-a- lifetime'' investment opportunities in the next five years. The Ruperts built Richemont up over two decades by buying watch and jewelry makers with cash from South African tobacco interests.

``It's funny because for many years, everybody said, `Get rid of tobacco, get rid of tobacco, get rid of tobacco,''' he said today in an interview after the meeting. ``Now that we're getting rid of tobacco, they're saying, `Whoa, whoa, whoa, it provides a stable cash flow.' But they understand it's better for all the shareholders.''

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Richemont Five-Month Sales Rise 11% on Chinese Sales (Update2)  

. Financiere Richemont SA, the world's largest jewelry maker, said five-month revenue gained 11 percent on Chinese demand for Cartier necklaces and Piaget watches.

Sales rose 11 percent from April through August, the Geneva- based company said today in a statement, matching the 11 percent median of 12 analysts' estimates gathered by Bloomberg News. Growth weakened from the first quarter's 13 percent and Richemont said the U.S. market is slowing, while the luxury goods industry faces ``difficult'' conditions beneath the top end of the market. . . .

The jeweler is splitting into a luxury-goods maker and an investment company at the same time that it spins off a 27 percent stake in British American Tobacco Plc to avoid higher taxes. The holding is co-owned by Remgro Ltd., which also is controlled by South Africa's billionaire Rupert family.

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BAT share listing shake-up dashes bid hopes  

Shares in British American Tobacco (BAT) fell by as much as five per cent today after it announced it was seeking a secondary listing on the South African stock exchange.

BAT lost 49p to £18.27 before recovering after luxury goods company Richemont and investment group Remgro, which are controlled by South Africa's billionaire Rupert family, said they would spin off a combined 27 per cent stake in BAT to shareholders.

The shake-up, which is being driven by impending tax law changes in Luxembourg, would place BAT in the top three companies on the South African exchange

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Implicit Guarantees May Not Be Worth the Paper They're Not On  

True, Richemont's "grand luxury" brands should be more resilient than many less-exclusive peers. Cartier and stablemates such as Van Cleef & Arpels and Piaget are accessible only to the world's wealthiest, consumers who are expected to keep spending, credit crunch or no. A strong presence in China, predicted to be the world's second-largest luxury market by 2015, should also help.

But Mr. Rupert has gone to some trouble to set up a fund that can invest in anything other than premium trinkets. It looks like one of the titans of luxury goods is hedging his bets.

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BAT to aid Richemont/Remgro restructuring 

British American Tobacco (LSE: BATS.L) is seeking approval from the Johannesburg Stock Exchange to obtain a secondary listing there to help Richemont and Remgro restructure their stakes in the company.

Swiss luxury goods maker Richemont has a 19.4% interest in BAT, while South African investment holding group Remgro, which wants to separate its tobacco interests from other operations, owns a 10.7% stake.

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• Now we’re smoking: BAT the new giant in South Africa 

British American Tobacco (BAT) is set to become South Africa’s biggest listed company, challenging stalwarts like mining giant Anglo American for top spot on the JSE.

At current market prices, BAT, which will have its secondary listing on the JSE, is valued at about R560-billion. Its primary listing will be in London.

The new listing is a result of a massive, complex restructuring of the Rupert family-controlled Swiss luxury goods group Richemont and its local investment group Remgro.

The restructuring will also bring about a massive payout to shareholders — R60-billion in the case of Remgro and just less than R120-billion for those with shares in Richemont .

For the first time in the history of the Rupert family empire, neither Remgro nor Richemont will be invested in tobacco. . . .

While Remgro has got rid of tobacco, Visser is optimistic about the future of BAT.

The tobacco business remains sound and BAT is a good company with a footprint in developed and developing economies, he said. . . .

But not everyone is happy.

Yussuf Saloojee of the National Council Against Smoking said BAT’s listing is “regrettable, not only because of the product it sells but also because of its conduct”.

He said the company sells its products to young people and has broken an advertising ban on a number of occasions.

He encouraged people not to invest in the company as it is not socially responsible.

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Rupert Family Companies Will Spin Off 27% BAT Stake (Update2)  

Cie. Financiere Richemont SA and another company controlled by South Africa's billionaire Rupert family will spin off a 27 percent stake in British American Tobacco Plc to avoid taxes.

BAT fell 2 percent in London trading, cutting the holding's value to 9.96 billion pounds ($19.1 billion). Richemont, which will split into two companies as part of the transaction, rose 3.3 percent in Zurich. Remgro Ltd., which the Ruperts also control, added 4.3 percent in Johannesburg. The spinoff will take place Nov. 3.

Richemont and Remgro are reorganizing the Luxembourg investment company that holds their BAT stakes because the Grand Duchy plans to end holding-company tax breaks from 2010. . . . .

The spinoff may draw investors to Richemont who avoid tobacco investments on ethical grounds, Alessandro Migliorini, an analyst at Helvea AG, wrote in a note to investors. He has a ``neutral'' rating on the stock.

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Cigarette company to become JSE`s largest stock 

After almost a century of being dominated by mining companies, a new king of the JSE is about to be crowned: cigarette company British American Tobacco (BAT).

When the dust settles after a complex reorganisation of Remgro (JSE:REM) and Richemont (JSE:RCH), the result will be a new secondary listing on the JSE of the London based tobacco company, towards the end of October.

The company's market cap will be around R560bn, edging out for top spot BHP Billiton

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Rupert Family Companies Will Spin Off 27% BAT Stake (Update2)  

Cie. Financiere Richemont SA and another company controlled by South Africa's billionaire Rupert family will spin off a 27 percent stake in British American Tobacco Plc to avoid taxes.

BAT fell 2 percent in London trading, cutting the holding's value to 9.96 billion pounds ($19.1 billion). Richemont, which will split into two companies as part of the transaction, rose 3.3 percent in Zurich. Remgro Ltd., which the Ruperts also control, added 4.3 percent in Johannesburg. The spinoff will take place Nov. 3.

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