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Philip Morris Rules Out Changes in Suchard Tender Offer

July 27, 1990

ZURICH, Switzerland (AP) _ Philip Morris Cos. on Friday ruled out any changes of its $3.8 billion tender offer for the parent company of Jacobs Suchard AG, the huge chocolate and coffee group.

In a brief statement, the New York-based tobacco, food and brewing company responded to an analysis by a Swiss bank, Bank Vontobel of Zurich, which suggested that public shareholders should refuse the offer as being too low.

Under a June agreement with Suchard Chief Executive Klaus J. Jacobs, Philip Morris obtained control of Jacobs’s private company, Colima Holding AG, which held 62 percent of the voting rights, but only 28 percent of the capital, of Suchard.

To enable Philip Morris to acquire full ownership of the Swiss company, other shareholders have until Sept. 3 to accept the tender offer.

The offer is 8,500 Swiss francs, or $6.071, for each bearer share, 1,660 francs, or $1,185, for each registered share and 758 francs, or $541, per participation certificate.

Philip Morris said Bank Vontobel’s analysis was inaccurate and misleading and that it ″has no plans to alter either the price or the timing or any other elements of its tender offer for shares of Jacobs Suchard.″.

″Particularly misleading in the Bank Vontobel research report is the implication that Philip Morris might increase the tender price in order to obtain possible U.S. tax benefits,″ it added.

The bank had suggested that Philip Morris could lose large U.S. tax benefits if it did not acquire 80 percent of Suchard’s capital.

Philip Morris responded that ″regardless of any possible U.S. tax benefits, and whether or not it obtains 80 percent of the Jacobs Suchard shares, Philip Morris has no intention of making any changes in the terms and conditions of the tender offer.″

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