US to spurn Imperial float

Imperial Tobacco, which is to be spun off from Hanson, will probably be spurned by US investors, after the recent traumatic events for the industry over there.

While the US tobacco received a boost on Friday when an Indiana jury rejected claims by an attorney's widow that the companies which sold her late husband cigarettes were negligent, it was the first bright spot in a black fortnight.

US analysts said the Indiana verdict was important because it suggested that a Florida jury's award, earlier this month, of damages for only the second time in history to a smoker who contracted cancer may have been an exception in a long run of industry victories in the courts.

In the UK, however, many still expect a difficult market for Imperial shares, marring its return to the stock market in October, after a 10- year absence. Paul Beaufrere, an analyst at HSBC James Capel, said US investors were unlikely to hold their new Imperial shares, "given the environment in the US".

Along with other market watchers, he predicts a significant "flow-back" of shares from the US to London.

Hanson itself will not raise any money directly from the demerger, details of which had been expected on Friday. But a technical hitch involving the US Securities and Exchange Commission and the New York Stock Exchange meant the announcement of listing details had to be postponed until Wednesday.

About a third of Hanson's shares are held by US investors, who are still reeling from the latest blows against the tobacco industry in that country. In the demerger, shares in Imperial will be offered on a matching basis to existing shareholders. The probable split is one share in Imperial for every 10 Hanson shares held. An Imperial spokesman said: "It is not necessarily the case that US investors will sell their Imperial shares, as we have no exposure to the US market at all."

Despite the Indiana ruling, however, last week saw the once seemingly invincible US tobacco industry on the ropes. On Friday, President Clinton implemented his promise of tougher action against smoking with a clampdown aimed initially at teenage smoking. Cigarettes are to be brought under the wing of the all-powerful Food and Drugs Administration. Initially, the FDA will restrict the use of vending machines and curb advertising aimed at teenagers.

The first bombshell came earleir this month when a Florida jury awarded Grady Carter and his wife $750,000 (pounds 480,000) in damages for negligence, after he had contracted lung cancer. It was only the second time a US jury has awarded damages in a smoking suit. The first award, in 1988, was overturned on appeal.

Brown & Williamson, the defendant, will appeal. But shares in BAT, its parent, lost more than pounds 1bn - 10 per cent of their value - after the verdict. Since then, bad news has come thick and fast. On Thursday, the state of Oklahoma launched a $1bn suit against tobacco companies, public relations outfit Hill & Knowlton, and several US law firms that have represented the tobacco industry. It became the 14th state to sue the tobacco industry in a bid to recoup the costs of treating smoking-related illnesses.

The significance of the Carter case is that the jury was handed evidence of deliberate concealment by the company. It showed Brown & Williamson writing about the addictive qualities of nicotine in internal documents from the 1960s, while publicly denying any such addiction. Such documents were not available to the plaintiffs in the Indiana case.

The implications in the UK, for Imperial, and Gallaher, its main rival, owned by US company American Brands, cannot be discounted.

Cameron Fyfe, a Scottish solicitor who is handling the only current cigarette claim in the UK, said the Carter case could have great relevance for claims in this country.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower