Imperial Tobacco Group Plc’s Logista distribution unit may be valued at more than 2 billion euros ($2.7 billion) when the cigarette maker sells as much as 30 percent of the stock in an initial public offering.
The shares will be offered to institutional investors at 12.50 euros to 15.50 euros each, implying a market value for Logista of about 1.86 billion euros ($2.5 billion) at the mid-point of the range, the Bristol, England-based company said today. Logista isn’t selling any new shares in the offering.
Imperial will use the IPO proceeds to either repay some of its 11.1 billion pounds ($18.9 billion) of net debt, or reinvest elsewhere in the business, the company said June 11. Bought by Imperial Tobacco in 2008 as part of its takeover of cigarette maker Altadis SA, Logista distributes goods from customers including tobacco producers and pharmaceutical companies.
“Today’s announcement reflects the strong level of investor interest in our business underlining our leading market positions in southern Europe and highly resilient business model,” Logista Chief Executive Officer Luis Egido Galvez said in a separate statement. “We are pleased with feedback and response to the news of our intention to float.”
The final IPO price will be announced on or around July 10 and may be outside the stated range, Logista said.
Business in the latest quarter has been “in line with the six months ended March 31” and also benefited from improved macroeconomic conditions across its main markets, it also said.
Spanish initial public offerings have raised $3.4 billion so far this year, making it the busiest first half for such sales in the country since 2011. Applus Services SA raised 1.1 billion euros in May as investors returned to the region’s market as the economy shows signs of recovery.
Imperial, the maker of Gauloises cigarettes inherited a 59.6 percent stake in Logista at the time of the 12.6 billion-euro Altadis takeover and later bought the rest in a deal that valued the logistics company at 2.3 billion euros.
Logista distributes goods to outlets such as bookshops, gas stations and convenience stores across southern Europe. The business posted economic sales of 1.01 billion euros in the year ended Sept. 30, Logista has said.
Imperial Tobacco shares were down 15 pence, or 0.6 percent, at 2,617 pence as of 2:14 p.m. in London.