BAT BUYS 85 PCT OF BENTOEL SHARES

Jakarta, June 18 (ANTARA) - British American Tobacco Plc (BAT) has bought a 85-percent stake in PT Bentoel Internasional Investama Tbk from PT Rajawali Corpora for US$494 million, a spokesman said.

The director of BAT Asia-Pacific, John Daly, said here on Wednesday the price was equal to Rp873 per share with a premium of 20 percent above the closing price of Rp730 per share on June 15, 2009.

"The tender offer for the remaining shares held by the public will be announced soon and hopefully could be settled by the end of August 2009," he said.

Based on assumptions that all the shares would be bought through the bidding process the transaction covering 100 percent shares of Bentoel could reach a total of US$580 million, he said.

"The transaction is a perfect strategic opportunity for entering the clove-cigarette market in Indonesia which is vast and still developing, which can be used as a foundation for further growth in the future," he said.

He said Indonesia is the world's fifth largest cigarette market based on volume with total sales reaching around 250 billion cigarettes a year or one of the world's ten biggest market in terms of profit value.

"The clove-cigarette market segment comprises around 93 percent of total market share," he said.

He said clove cigarettes were made of tobacco mixed with cloves and produced by machine or manually.

Among Bentoel brands are Star Mild, X Mild and Sejati, he said.

Daly said in 2008 Bentoel sold 17.7 billion cigarettes which was around seven percent of the country's market share to become one of the four biggest cigarette makers in Indonesia.

Bentoel's income before interest, tax, depreciation and amortization for the past 12 months from March 31, 2009 totalled US$53 million, he said.

"Bentoel's net debt totals US$164 million by March 31, 2009," he said.

British American Tobacco Plc has already had a business in the country namely PT BAT Indonesia which controls around two percent of the country's market and only competes in non-clove cigarettes.