Jump to full article: Bloomberg News, 2008-08-08
Author: Thomas Mulier
Intro: 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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