BAT ups bid to pounds 4.5bn for Canadian giant

BRITISH AMERICAN Tobacco, the world's number two tobacco company, yesterday announced that it had raised its bid for Imasco, the Canadian conglomerate, after it agreed the sale of Imasco's drugstore chain, Shoppers Drug Mart.

BAT is raising its offer for the 58 per cent of Imasco it does not already own to C$41.6 (pounds 18) a share from a minimum price of C$40, which was agreed when the deal was announced in August. BAT said it would sell the 824 Shoppers outlets for C$2.55bn to an investor group led by Kohlberg Kravis Roberts & Co.

The UK group will pay C$10.68bn (pounds 4.5bn) for the rest of Imasco in a deal that has been recommended by both the Imasco board and a specially established independent committee.

Purdy Crawford, chairman of Imasco and of the independent committee of its board of directors, said: "We believe that we have arrived at an attractive transaction."

Imasco shareholders have not yet voted on the deal.

BAT's intention is to sell off all Imasco's non-tobacco interests, leaving it with the Canadian company's main asset, Imperial Tobacco. Imperial has a dominant 69 per cent share of the Canadian cigarette market.

BAT has already agreed to sell Imasco's 92 per cent-owned CT Financial Services unit to Toronto Dominion Bank for C$7.85bn, leaving only its Genstar Development property concern to sell.