* Imperial to retain majority of Logista shares
* Imperial takeover of Logista valued it at 2.3 bln euros
* Logista plans to expand in other sectors
(Adds historical valuation)
By Martinne Geller and Paul Sandle
LONDON, June 10 Imperial Tobacco Group
is to list its European logistics business Logista on the
Spanish stock market with a sale of shares to institutional
investors, the British company said on Tuesday.
Imperial gained control of Logista, which distributes
products for Imperial and other tobacco makers in southern
Europe, when it acquired Franco-Spanish business Altadis.
Logista also works for companies in the broader consumer
goods sector as well as telecom operators, pharmaceutical
companies and publishing houses, distributing their goods to
about 300,000 "delivery points" including shops, petrol
stations, pharmacies and hospitals, hotels and restaurants.
Imperial, the world's fourth-largest international tobacco
group, said on Tuesday Altadis aims to sell a tranche of shares
in Logista through an offer to certain institutional investors
but Imperial will retain a majority stake, which some analysts
Imperial's shares were up 0.4 percent at 2614 pence by 1148
"This means that ... the asset-heavy business will continue
to weigh on returns on capital and profitability," said
Morningstar analysts in a research note.
"We expect Imperial to reduce its stake over time," they
Logista, which Morningstar estimates could be valued in the
share sale at about 1.1 billion pounds ($1.9 billion), generates
a low single-digit operating margin, whereas the tobacco
business generates a margin north of 40 percent even as its
revenue is slipping due to increasing regulation and fewer
What is more, being in control of store delivery has less
competitive value in tobacco than it does for other products
like soft drinks, Morningstar said, since in-store displays are
often heavily regulated.
Imperial, whose brands include Davidoff and Gauloises
cigarettes, Golden Virginia and Drum rolling tobacco and Cohiba
Cuban cigars, had said in February it was considering listing
shares in Logista.
RETURN TO MADRID MARKET
Logista, which was originally spun off from Tabacalera in
1999 when the Spanish tobacco group merged with its French
counterpart SEITA to form Altadis, was still nearly 60 percent
owned by Altadis when Imperial bought the Franco-Spanish group
Immediately after the Altadis deal Imperial bought the rest
of Logista in a mandatory cash offer for the remaining shares at
a price of 52.50 euros a share, which valued the entire
logistics firm at some 2.3 billion euros ($3 billion).
Since then, the company's turnover has risen 17 percent to
about 1 billion euros in the last financial year ended Sept. 30,
2013, when it made an operating profit of 211 million euros.
In returning to Madrid's stock market Logista follows a
succession of local IPOs this year including eDreams Odigeo
in April and Applus Services in May.
Logista's chief executive, Luis Egido Galvez, said the group
had maintained a solid operating performance in recent years
despite a general decline in tobacco volumes and a weak economic
environment in southern Europe.
His strategy is to further expand in sectors beyond tobacco,
as well as improve operational efficiencies and introduce new
services, he said.
Credit Suisse and Goldman Sachs are joint
coordinators for the IPO and are joined by Morgan Stanley
as joint book runners.
($1=0.5956 British pounds)
(With additional reporting by Robert Hetz in Madrid; Editing by
David Goodman and Greg Mahlich)