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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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Richemont, Remgro Plan to Spin Off 27% Stake in BAT (Correct)  

Cie. Financiere Richemont SA and Remgro Ltd., companies controlled by South Africa's billionaire Rupert family, said they will spin off a combined 27 percent stake in British American Tobacco Plc before higher taxes in Luxembourg hurt the investment.

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Richemont to spin off BAT stake 

Richemont, best known for its Cartier jewellery and Montblanc pens, on Friday unveiled its long awaited restructuring into a pure luxury goods group by distributing its 19.4 per cent stake in British American Tobacco to shareholders.

The move, long sought by analysts, will involve the distribution of 90 per cent of its BAT holding to Richemont shareholders. The remaining 10 per cent will go to a new Luxembourg investment vehicle called Reinet. . . .

However, action has been deferred in the past by the argument that the tobacco holding provided stability against the more volatile luxury goods business, especially in an earlier period when Richemont was less broadly based in the luxury goods sector and more vulnerable to market and currency swings.

Richemont’s interest in BAT traces back to its origin. Anton Rupert founded Rothmans in South Africa during the 1940s. This ultimately became Remgro and its international operations were spun out in 1988 to form Richemont, dual-listed in Luxembourg and Switzerland, with a third of the equity now held in South African depositary receipts. Rupert family control is retained via special voting shares.

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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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Richemont, Remgro to spin off 30 pct BAT stake  

Swiss luxury goods maker Richemont and South Africa's Remgro said on Friday they are to spin off their jointly held 30.1 percent stake in British American Tobacco.

Richemont, controlled by the Rupert family, will repackage its entire luxury business as a new Swiss-listed company, Compagnie Financiere Richemont (CFR).

Meanwhile 90 percent of the Richemont and Remgro BAT stake will be given to shareholders, leaving 3 percent of BAT to be held in a new investment vehicle. . . .

There will later be a rights issue and Reinet shareholders will be able to re-inject their BAT shares into the Luxembourg vehicle. The value of Reinet's assets held will be just under 1 billion euros before the rights issue, the spokesman said.

Richemont, which makes Cartier watches and Piaget jewellery had already said it was thinking of splitting into a luxury business in Switzerland and a Luxembourg-based investment vehicle to house its BAT stake.

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Richemont, Remgo To Spin Off BAT Stakes  

Cie. Financiere Richemont SA and Remgro Ltd. said Friday they will spin off their combined 30% stake in British American Tobacco PLC. Both companies are controlled by South Africa's Rupert family.

The moves, aimed at avoiding a change in taxation in Luxembourg that would penalize the investments, will edge Geneva-based Richemont closer to becoming a pure luxury goods company and potentially lessen the discounts at which it and South African investment concern Remgro trade.

In both transactions, shareholders of the companies will be offered a direct holding in BAT. In South Africa, a secondary listing of the tobacco company will allow investors to hold shares without using existing foreign-exchange allowances.

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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 boost Richemont stock . . .

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. . . .

Richemont and Remgro gained a combined 35 percent stake in BAT on merging cigarette maker Rothmans International with the U.K. company in 1999.

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BAT JSE listing ‘would give market a fillip’  

IF BRITISH American Tobacco (BAT), which is 10,6% held by local investment holding company Remgro, were to list on the JSE, the transaction would be significant for the domestic stock market because BAT’s market capitalisation, at £39bn, was similar to that of Anglo American, one of the JSE’s two largest stocks, according to Simon Raubenheimer, a senior analyst at Allan Gray.

Allan Gray holds in the region of 5% of Remgro and Raubenheimer voiced his confidence in BAT’s ability to sustain and grow profits irrespective of global conditions.

Last month, Remgro released a positive set of annual results and confirmed that a secondary listing for BAT on the South African bourse was under investigation.

Remgro is splitting out its tobacco interests because of changes in the legal and financial environment in Luxembourg. This is where Remgro’s joint venture partner, Richemont, is listed.

Remgro CEO Thys Visser said a South African listing for BAT would mean local shareholders could benefit from the distribution of shares.

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In depth - Richemont break-up ($$) 

Cigarettes are famously moreish. For investors too – tobacco companies’ captive customer bases and reliable cash flows can be hard to give up. Hence the continued complication of what should be a relatively simple operation: separating the luxury goods business of Richemont from the stake it owns in British American Tobacco. That 19.4 per cent holding accounts for almost half of the Swiss group’s $33bn market capitalisation.

Anton Rupert founded Rothmans in South Africa during the 1940s.

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Nick Fletcher: Tobacco sell-off stubs out early gains for FTSE 

Tobacco shares were under pressure yesterday in another jittery trading day.

British American Tobacco fell 33p to £19.02 on fears that a large chunk of shares may soon come onto the market. This follows news that the Swiss group Richemont is considering splitting into two companies, a luxury goods business and a company to hold the 30% stake in BAT it holds in partnership with investment group Remgro.

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Richemont Full-Year Profit Growth Slows on Dollar (Update2) 

ie. Financiere Richemont SA, the world's largest jewelry maker, said full-year profit growth slowed after the weakness of the dollar and a slowing economy hurt U.S. necklace and bracelet sales.

Net income rose 18 percent to 1.57 billion euros ($2.48 billion) in the year through March, the Geneva-based owner of the Cartier brand said today, meeting analysts' estimates. That was less than the first-half's 28 percent gain. Richemont also announced that it plans to split into two companies, spinning off its 19.3 percent stake in British American Tobacco Plc. . . .

The jewelry maker and the billionaire Rupert family's Remgro Ltd. use Luxembourg-based R&R Holdings SA to own about a third of BAT, the maker of Lucky Strike cigarettes.

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BAT May Trade Stock in Johannesburg After Richemont Spinoff 

British American Tobacco Plc may trade its shares in Johannesburg once Cie. Financiere Richemont SA and Remgro Ltd. complete a reorganization of their interest in Europe's largest cigarette maker.

Richemont, controlled by South Africa's Rupert family, and Remgro use Luxembourg-based R&R Holdings SA to own nearly a third of BAT. The European Union forced Luxembourg to end tax breaks for holding companies by 2010, prompting the two businesses to reorganize their investment in the London-based maker of Dunhill and Kent.

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UPDATE 2-Richemont profit rises, still considering split  

Swiss luxury goods maker Richemont met expectations with its full-year net profit and said it may set up an investment vehicle for its tobacco holdings.

The maker of Cartier watches, Piaget jewellery and Montblanc pens said on Thursday its profit for the year ending March 31 rose 18 percent to 1.57 billion euros ($2.5 billion), in line with analysts' forecasts, but said the current economic crisis was a cause for concern.

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Richemont FY net beats consensus, group considers restructuring UPDATE  

Richemont reported a full-year net profit of 1.570 billion euros, up from 1.329 billion in the same period of last year, amid strong demand for luxury goods and a boost by a larger contribution from its stake in British American Tobacco.

The world's second-largest tobacco group contributed 610 million euros to the group's bottom line, up from 540 million in the fiscal year 2006/2007.

Analysts had forecast net profit of 1.530 billion to 1.605 billion, or 1.561 billion on average.

The Swiss luxury goods maker said it is considering proposals that would see the group split into a separate luxury business, headquartered in Switzerland, and an investment vehicle to be based in Luxembourg.

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• BAT May Trade Stock in Johannesburg After Richemont Spinoff 

British American Tobacco Plc may trade its shares in Johannesburg once Cie. Financiere Richemont SA and Remgro Ltd. complete a reorganization of their interest in Europe's largest cigarette maker.

Richemont, controlled by South Africa's Rupert family, and Remgro use Luxembourg-based R&R Holdings SA to own nearly a third of BAT. The European Union forced Luxembourg to end tax breaks for holding companies by 2010, prompting the two businesses to reorganize their investment in the London-based maker of Dunhill and Kent.

A review of the investment will result in Richemont splitting into a luxury business based in Switzerland and an investment company based in Luxembourg, Richemont said in a stock exchange statement today. Shareholders would get shares in the investment company and would be able to receive part of Richemont's stake in BAT directly, it added.

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