February 13, 2014 / 2:25 PM / 4 years ago

UPDATE 2-Imperial Tobacco considers market listing for logistics unit

By Martinne Geller

LONDON, Feb 13 (Reuters) - Imperial Tobacco Group is considering listing shares in its European logistics division on the stock market, as it focuses on its core cigarettes business that is declining in many markets.

Imperial, the world’s fourth-largest international tobacco company by market share, said on Thursday it was reviewing options related to a potential initial public offering (IPO).

Shares in the maker of Davidoff and Gauloises cigarettes were up 5.5 percent at 2347 pence by 1534 GMT.

Like its rivals, Imperial is grappling with lower smoking rates in a number of markets due to increasing government regulation and more health-aware consumers. It plans to launch two electronic cigarettes this year, which are safer alternatives to traditional cigarettes.

Madrid-based Logista distributes Imperial’s cigarettes in countries including France, Spain and Italy but also has non-tobacco customers. Last year it recorded revenue of 8.3 billion pounds and adjusted operating profit of 176 million pounds, according to Imperial’s annual report.

Imperial is working with Credit Suisse and Goldman Sachs on the potential IPO, said a source familiar with the matter.

Officials at Imperial and Goldman declined to comment on the appointment. Credit Suisse was not immediately available.

Imperial reported earlier on Thursday that underlying tobacco net revenue rose 1 percent in the first quarter, in line with its expectations.

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