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RICHMONT TO SELL TOBACCO SHARES
Byline: James Fallon
LONDON — Compagniere Financiere Richemont SA Monday took another step to increase its focus on luxury goods as it announced plans to sell more of its tobacco holdings and raise up to $548.3 million.
Richemont and Rembrandt Group Ltd. of South Africa jointly own R&R Holdings SA, which owns a 35 percent stake in British American Tobacco PLC. R&R said Monday it has notified BAT of its plans to redeem a second tranche of 60.4 million BAT preference shares in June at the price of $9.08 per share. The amount to be redeemed represents 25 percent of the preference shares held by R&R.
The latest announcement follows one R&R made in December of plans to redeem its first tranche of preferred shares, representing 25 percent, in June at the same price.
R&R said the notification Monday means it now has announced plans to redeem half of its holding in BAT, which will raise a total of $1.1 billion. The remaining 50 percent will be redeemed in cash in June 2004 at a price of $10.66 per share unless the preferred shares are previously converted to ordinary shares via a sale by R&R to another party.
R&R is two-thirds owned by Richemont and one-third by Rembrandt, another holding company of the Rupert family, which has management control of Richemont. The Swiss-based Richemont owns the Vendome Luxury Group, which is made up of such brands as Cartier, Chloe, Alfred Dunhill, Montblanc, Piaget, Baume & Mercier, Vacheron Constantine, Van Cleef & Arpels, Sulka and Hackett. Richemont over the last few months has been unwinding its operations in tobacco and satellite television in order to increase its focus on the luxury goods businesses.
