PM History/2 - Legacy Tobacco Documents Library

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PM history/54
~ Cote d'Or~rom_under Nestle's nose/HAMISH MAXWELL : a "man of modest style
/J & grand ambitions,''-he is ~ovial, but ha,-d as n'lQ" . .his father a
tob . leaf dealer in Li.verpool . . .b° RVED IN RAF & studied history at Cambridge,
went to work selling tours for Thos . Cook, that brought him to
US where he met his wife & via his father's connections landed job w/PM
in '54 . . .i-n '81 was a main factor in the Rothmans deal just as RJR was
about to look it up . . .a self-confessed "hands-on" mgr, has a habit of
bypassing sr executives to get reports straight from middle-rankers . . .
is said EVER TO LOSE HIS APLOMB is tireles erfectionist, or as one
colleague put it, he has a "igh level of constructive dissatisfaction' .'//
MARLBORO MAN TAKES HIS COFFEE STRONG, FT 6-25-90 : PM likes the deal because
it (1) increases its stake in food biz, (2) virtually doubles size
of foodbiz in Europe, (3) greatly improves geographic spread of the KGF
coffee interests &(4at a stroke makes it a subc~y
co~e~je,3~g~y sector .'.~~p"engT`earr`ifings gr6w~'o~%-"yr'.~y~'rom KGF . . .
-£~ie move puts`'YSIl+I'"i2r`Ynuch better position to compete in EC before the '92
rules go into effec~JR is now 3 in paekaged foods in USTi~hobblec
'by LBO debts . . .PM could buy still other co .s like Campbell Soup, Quaker
Oats, PepsiCo (though this last could run as high as $18 billion), & the
smaller co s are a better risk//ECONOMIST 6-30-90 : speculates that next
~ on PM shopping list might be pADBURY SCHWEPPES, PM moving fast for fear
J rivals will get most at the gluttonous feast to begin in '92 . . .good match
by product & geography for Suchard to grab Cadbury . . .PM was really after
Such .'s coffee biz & may shy from Cadbury's soda biz (soft-drink)//PM
HOPES TO GAIN IN EUROPE FROM SUCHARD BID, WSJ 6-25-90 . PM to acguire
80% o for $3 .8 bill'o would vault PM from #5 to . n F:uronean
food biz . . .PM planning to move 3.n irection o - , but
this could be a big gamble in mkt w/320 million WEuropeans w/their 9
languages & distinctive tastes & cultures/cuisines . . .Miles : no intention
. to imprt Suchard candv to US, deal doesn't involve any "noticeable expansion
o PsT~iness in the US" . . .Emanuel Goldman : "THIS IS AS:O mT-
TTON xrFAVFN, It's agood £it and there's virtuallv no~S' dilution"/
has squelched rumors of much larger PM acquisition that might clip future
earnings . . .PM had needed more scale in Europe/true, PM & Nestle have
established strong 9.ntl brands w/Marlboro & Nescafe, still fear is that
regional tastes are not easily changed///REUTERS 6-22-90, interview w/
I MILES : Euro . foodbiz has been growing about 3 .5% yrly or nearly 3X US
!I mkt &'92 will probably prolong this, making attractive mktplace well
into 21st cent . . .i4t~~~e,.~ tion *s; to o~erate Such very mq.~"We will
look parjacularly~r'syiiei~gie`"s`'`iii '& dev . spending
& mktg"///MANY SUCHARD MINORITY HOLDERS STEAMED OVER PM OFFER, WSJ 7-16-
90 : 90: Jacobs ee s .~oremium over o er s are o lders is a pointed
exampie of ri'~s-in invsesting in foreign rucs, esp . as a minority shareholder'tt'*'*'note
crit . from CEO of Globe Finlay Inc, NY-based money management
firm (intl money) : here's a US co . buying a Swiss co . w/US shareholders
who appear to be being discriminated against" . . .'n US & Briit tak ,
al1 shareholders must generally be offered the same price u not the
case a.n m'--n Eq urs coun ier~' ; s in~wi z .~ ,~JGermany,NetS-erlands & Sweden
minority holders can get a raw deal . . . compared to any other food co .,
price paid for minority shares is undervalued . . .in most other big food
a9quisitions, avg price has been 19X EPS but in Such . case it's about ~1O
142X EPS while .~Tacobs_ got e ._ 31 .7X . . .laclc of fairness suggested/PM ~
ARGUES : the purchase of oh.ma rom Jacobs & tender offer to minority 1,3
holders are two ar te transactions & even though not required, PM is -P
o PRE s w ereas aco s, a er uying ~
avg price, but critics say that was Jacobs's choice to do this & is in `'
fact separate transaction . . .some cooler heads like RCB Trust Co of °'
Stamford CT says PM was m re1 look' o f ` -
''er6 . . .in fact, oreigners like US holders are getting oppty to sell
at a profit/PM will not alter its bid to minority holders (RK : no need
to)//JACOBS GETS $2 .26 billion on deal, FT 7-11-90c minoroty holders
getting premium of 26 .7% over avg daily closing price for the JS shares
over the 6 mos before 5/25 when the price was inflated by takeover rumors//
PM press release 9-19-90 : PM controls 99 .6% of JS voting rights
--PM TAPS WM C ApBEL TO SUCCEED HOUMINER AS PM-US CHIEF, WSJ 9-12-90 :
The surprise move signals unhappiness w Ehud s management techniques &
style ; Campbell, 46, is sr vp-corp planning/Ehud said to have made hisW
.
e at PM bv mastermindin~ divestiture o£ 7-~'p a~cquisi~ions of GF &
ft . . .a leading dis~ibutor notes that £or first time in recent memory
PM-USA will fall short of its unit volume projections & Campbell seen as
"more in tune? w/the everOchanging dynamics of the biz/top management
, also said to be unhanoy w/Ehud's decision to rush PM into exoansion of
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