LONDON — Swiss luxury goods group Compagnie Financière Richemont AG plans to sell its preferred shares in British American Tobacco, a transaction that will result in an exceptional gain of about $303 million during the fiscal year that ends March 31.
This story first appeared in the December 12, 2002 issue of WWD. Subscribe Today.
The company said in a statement Wednesday that its R&R Holdings SA subsidiary will sell its 120.9 million BAT preference, or preferred, shares through a warrant offer at approximately $10.50 a share in May 2004. R&R will, however, hold onto its 604.3 million common shares of BAT.
Richemont said it stands to collect “a little bit” more money by selling warrants now. “The warrant issue effectively crystallizes the proceeds to be received in 2004,” the statement said. The offering for the warrants will close Jan. 23, 2003. R&R also has the option to sell its preference shares to BAT for the same price in June 2004. R&R will receive approximately $1.3 billion from the sale to warrant holders or BAT in 2004. Richemont’s share of the proceeds will be approximately $850 million, translating into an extraordinary gain of $303 million.
Richemont’s common and preferred shares currently represent about 31.5 percent of the issue share capital of BAT.