Jump to full article: Reuters, 2001-11-30
Intro: Canadian cigarette maker Rothmans Inc. (ROC.TO) on Friday trumped U.S.-based R.J. Reynolds Tobacco Holdings' (NYSE:RJR) counter-bid for Sante Fe Natural Tobacco Co. with a $353.7 million offer.
Rothmans said its enhanced offer for Santa Fe, a maker of American Spirit additive-free cigarettes, consists of $162 million in cash, or $57 million more than its original offer.
All other terms of Rothmans original offer remain the same including the issue of $105 million in Santa Fe debentures and 4.24 million Rothmans common shares with a value of $77.7 million.
R.J. Reynolds, the No. 2 U.S. tobacco company said on Nov. 22 it was offering $320 million in cash for Santa Fe, a bid that was $45 million higher than Rothmans' $275 million cash, stock and debt offer. The purchase of Santa Fe would help boost earnings and give an additional strong brand name to R.J. Reynolds, which currently sells Camel, Winston, Salem and Doral cigarette brands.
The revised offer is superior because the cash payout includes deferred incentive payments and requires no further due diligence, Rothmans said in a statement.
Rothmans said its 11 percent higher offer will allow Santa Fe to remain a stand-alone operation, and could close as early as January 2002.
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