Imperial Tobacco shares rise on bid talk

By David Jones

LONDON (Reuters) - Shares in Imperial Tobacco (IMT.L) rose strongly on Friday after its bid for Franco-Spanish rival Altadis sparked talk U.S. tobacco giant Altria (MO.N) could launch its own bid for the UK company.

Imperial is the only big international business that the world's biggest tobacco group Marlboro-maker Altria could buy for anti-trust reasons, and if Imperial succeeded in taking over Altadis ALT.MC this opportunity will disappear, analysts said.

"Altadis should be the final poison pill raising anti-trust barriers beyond reasonable levels for Altria," said analyst Charles Manso de Zuniga at Dresdner Kleinwort.

Altadis has large market shares in its home markets of France and Spain and so would be virtually impossible for Altria to take over because it also has big shares in these countries.

Imperial shares ended up 4.9 percent at 23.30 pounds to be the FTSE 100 Index's biggest gainer after an 8.6 percent rise on Thursday. Altadis shares closed off 3.6 percent at 43.75 euros.

After Altria's Kraft spin-off in the next few weeks, it will have a market value of over $130 billion (67 billion pounds) and be virtually debt-free and could afford to pay up to 25 pounds a share for Imperial, or 16.9 billion pounds, say analysts.

"An Altria deal is not likely, but it has to be considered and it makes Imperial vulnerable," another analyst said.

Altria would have to sell off businesses in Britain and Germany to get around competition concerns, and this may dilute the attractiveness of a deal, analysts said.