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Rothmans Inc. announces commencement of compulsory acquisition by Philip Morris International Inc. (PMI) 

Rothmans Inc. announced today that, since the offer by PMI was accepted by shareholders holding more than 90% of Rothmans Inc. common shares, PMI has exercised its rights under the compulsory acquisition provisions of the Canada Business Corporations Act to acquire all of the outstanding common shares of Rothmans Inc. not already owned by PMI at the price C$30.00 cash per share. Further details are provided in PMI's Notice of Compulsory Acquisition which is available on SEDAR at www.sedar.com under the SEDAR profile of Rothmans Inc. For further information: Barry Joslin, (416) 442-3634

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• Philip Morris Int'l completes Rothmans buyout  

Philip Morris International, maker of Marlboros overseas, said Tuesday it has bought about 94 percent of the stock of Canadian cigarette maker Rothmans Inc.

The company said it bought all the shares that were tendered and will pay for any remaining shares on Thursday. It said shareholders of about 63.9 million shares had responded to its tender offer.

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Philip Morris International: 68% of Rothmans Shares Tendered 

Philip Morris International Inc.'s (PM) planned C$2 billion acquisition of Rothmans Inc. (ROC.T) moved closer to completion as more than two-thirds of shares outstanding have been tendered in favor of the deal.

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Philip Morris International Inc. (PMI) Receives Investment Canada Approval for Rothmans Offer 

Philip Morris International Inc. (NYSE/Euronext Paris: PM) today received Ministry of Industry approval pursuant to the Investment Canada Act in connection with the company's proposed acquisition of Rothmans Inc. (TSX: ROC).

The issuance of this approval satisfies the last remaining regulatory condition to the company's acquisition offer dated August 7, 2008. In connection with the determination of net benefit, the company provided certain undertakings, including pledges to continue to operate Rothmans, Benson & Hedges Inc.'s current manufacturing facilities in Canada, invest in their modernization and provide minimum employment assurances.

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Philip Morris International Inc. (PMI) extends Rothmans offer pending Investment Canada review 

Philip Morris International Inc. (NYSE / Euronext Paris: PM) announced today that it has extended the expiry of its CAD $30.00 per share cash offer to purchase all of the outstanding common shares of Rothmans Inc. (Rothmans).

The extension is procedural, being related to the last remaining regulatory approval required for the transaction, namely a determination of net benefit by the Minister of Industry pursuant to the Investment Canada Act.

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Rothmans Inc. announces redemption of RBH bonds 

Rothmans Inc. announced today that its 60%-owned subsidiary, Rothmans, Benson & Hedges Inc. ("RBH") is repaying its currently outstanding 5.552% Senior Unsecured Bonds due December 21, 2011 in the principal amount of C$150 million (the "Bonds").

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Rothmans Inc. announces resolution of RCMP investigation 

Rothmans Inc. announced today that an agreement has been reached with the Government of Canada and the governments of all ten provinces that resolves the RCMP's investigation relating to sales of products exported from Canada by Rothmans, Benson & Hedges Inc. ("RBH") in the period 1989 - 1996. Under the terms of the comprehensive agreement, payments expected to total C$550 million are to be made commencing in 2008 and over the next ten years. As part of the overall resolution, RBH has entered a plea of guilty to a single count of violating a provision of the Excise Act (Canada). As previously disclosed, the RCMP investigation related to allegations that some of the tobacco products manufactured and exported by RBH were illegally smuggled back into Canada without payment of applicable excise and tobacco taxes and duties. RBH and Rothmans Inc. have agreed to this overall resolution in order to bring closure to this legal matter and to put an end to the uncertainty and burden on the companies arising from the RCMP's investigation. . .

The resolution of the RCMP investigation was a condition of an agreement, also announced today, by Philip Morris International Inc. to make an offer to purchase all outstanding shares of Rothmans Inc. at a price of $30.00 per share.

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Rothmans reports loss after smuggling settlement  

Rothmans Inc (ROC.TO), which is being bought by Philip Morris International Inc (PM.N), reported a first-quarter loss on Tuesday, hurt by expenses after it admitted to helping tobacco smuggling.

Canada's No. 2 cigarette maker said it lost C$354.4 million ($334 million), or C$5.20 a share, compared with a profit of C$33.8 million, or 49 Canadian cents a share, a year earlier.

Rothmans said its profit was hit by expenses relating to a settlement involving its unit Rothmans Benson & Hedges Inc, which in late July admitted to aiding the contraband tobacco trade.

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• Rothmans reports loss after smuggling settlement  

Rothmans Inc, which is being bought by Philip Morris International Inc, reported a first-quarter loss on Tuesday, hurt by expenses relating to a police investigation into tobacco smuggling.

Canada's No. 2 cigarette maker said it lost C$354.4 million ($331 million), or C$5.20 a share, compared to a profit of C$33.8 million, or 49 Canadian cents a share, a year earlier.

Rothmans said profits were hurt by expenses relating to a settlement involving its unit Rothmans Benson & Hedges Inc, which in late July admitted to helping smugglers.

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Rothmans reports results for first quarter of fiscal 2009 

Rothmans Inc. (the "Company") incurred a loss of $354.4 million for the first quarter or ($5.20) basic loss per share, compared to earnings of $33.8 million or $0.50 basic earnings per share in the same quarter of fiscal 2008. The loss in the period results from the expenses incurred in connection with the previously announced resolution of the RCMP investigation, the make-whole premium associated with Rothmans, Benson & Hedges Inc.'s $150 million 5.552% senior unsecured bonds, series A and certain expenses associated with the offer by a wholly-owned indirect subsidiary of Philip Morris International Inc. These expenses are described in more detail below and in the accompanying MD&A for the quarter ended June 30, 2008. Adjusted operating earnings and adjusted operating earnings per share were $35.4 million(1) and $0.52(1) per basic share versus $33.8 million and $0.50 per basic share in the comparable period in the prior year primarily due to lower income tax rates in the recent quarter. Adjusted operating earnings exclude the impact of the expenses described above. Sales at the Company's 60%-owned subsidiary, Rothmans, Benson & Hedges Inc. (RBH), net of excise duty and taxes, decreased to $176.2 million in the most recent quarter compared with $177.4 million in the first quarter of fiscal 2008. Continued consumer movement into the cigarette price category and higher trade program spending were only partially offset by price increases implemented during the first quarter of fiscal 2009.

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Rothmans slips into red on investigation, takeover charges 

A $415-million charge related to the settlement of smuggling charges pushed Rothmans Inc.'s first-quarter earnings into the red, the company said Tuesday.

Toronto-based Rothmans reported a net loss of $354.4-million ($5.20 a share) for the quarter ending June 30, compared with net earnings of $39-million (50 cents) in the year-earlier quarter. . . .

Excluding the charges, Toronto-based Rothmans was cash positive.

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Rothmans Inc. mails directors' circular to shareholders recommending acceptance of C$30 per share all cash offer 

Rothmans Inc. ("Rothmans" or the "Company") announced today that Philip Morris International Inc. ("PMI") has mailed its previously announced offer to all Rothmans shareholders to purchase all of the outstanding common shares of Rothmans for $C30.00 per share in cash (the "Offer"). The Offer and the take-over bid circular of PMI are accompanied by Rothmans' directors' circular which confirms that the Rothmans Board of Directors, acting upon the unanimous recommendation of its Special Committee, has determined that the Offer is fair from a financial point of view to the shareholders of Rothmans and is in the best interests of the Company and that the Rothmans Board of Directors is recommending that the shareholders accept the Offer and tender their common shares to the Offer.

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Rothmans Inc. announces take-over offer by Philip Morris International 

Rothmans Inc. announced today that it has entered into a definitive support agreement with Philip Morris International Inc. ("PMI") that provides for an offer to be made by PMI, by way of a take-over bid, to all Rothmans Inc. shareholders to purchase all of the outstanding common shares of Rothmans Inc. for C$30.00 per share in cash (the "Offer"). The Offer has the full support of the Board of Directors of Rothmans Inc. The transaction values Rothmans Inc. at approximately C$2 billion.

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Don't want to quit Rothmans? Just say no 

No tobacco company is ever going to score highly on the warm-and-fuzzy scale. But Rothmans took the "only-investors-matter" approach to extremes. With some of the fattest profit margins in Corporate Canada, the company can afford some sweet downtown office space. Instead it occupies a tower in a dumpy part of Toronto, close to nothing. Management does zero to court the press and eschews image makers. The company's head of corporate affairs - a title that in many companies is reserved for a professional spin doctor - is actually an ex-tobacco salesman.

The parsimony extends to how it pays management. . . .

The company is a textbook case of how it's usually better not to dilute a great business by diversifying into other, inferior businesses. (Had some other Canadian consumer firms learned that lesson - Labatt and Molson, we're looking at you - they might have retained their independence.) Rothmans refused to make wacky acquisitions. They simply let the cash pile up. When the pile got too high, they paid it out. You could have bought a share of the company for $8 seven years ago, collected $11.73 in dividends since then, and still own a security that's now worth nearly $30.

This, remember, is in a declining industry. . . .

Philip Morris is not really paying a knockout price. As part of the deal, it also got Rothmans to cancel its dividend, taking $24-million out of shareholders' pockets. (See Andy Willis' Streetwise blog for more on that.)

For investors, replacing Rothmans won't be easy.

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WASHBURN: Lack of ethics in business harms companies, individuals  

When the $1.15-billion fine against Imperial Tobacco and Rothmans' Benson & Hedges was announced last week, it was a paltry sum compared to the companies' actions. . . .

Socrates said, "Vice harms the doer." Even if no one ever finds out and we can get away with doing something wrong, the act hurts us more than it hurts the victims.

But in a cynical world, Socrates appears to be talking into the wind. No one pays attention to this kind of thinking any more. Since Gordon Gekko announced in the filmWall Street,"Greed is good. Greed works," a generation of MBA students has felt it had a license to do whatever it takes to make money.

And, this is the heart of the problem. When people lose trust in business, business loses even more. Business loses when we think every time a corporation sends out a press release, it is full of lies. . . .

Businesses need to take this issue of trust more seriously. It is true; one bad apple spoils the barrel. Not only does it undermine the fundamental economics of the 21st century, but it also deepens the pervasive cynicism, which is a trademark of our times. This distrust spreads like a cancer through all aspects of our lives.

If there is a way out, it will not be legislated. Morals cannot be successfully turned into laws. It is only the actions of individuals of conscience that will make this change possible. It is going to take a massive change of heart. Sadly, it is hard to see how that will happen.

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