REG - British Amer.Tobacco - Tender Offer

British American TobaccoAnnouncement

15/04/2024 12:00

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RNS Number : 6307K  British American Tobacco PLC  15 April 2024

 

PRESS RELEASE

British American Tobacco Announces £1 bn in Cash Capped Debt Tender Offer

London, United Kingdom; April 15, 2024 - British American Tobacco p.l.c.
("BAT") announces today that B.A.T Capital Corporation, a corporation
incorporated in the State of Delaware ("BATCAP") and B.A.T. International
Finance p.l.c., a public limited company incorporated under the laws of
England and Wales ("BATIF" and, together with BATCAP, the "Offerors"), wholly
owned subsidiaries of BAT, have commenced debt tender offers to purchase (the
"Tender Offers") for cash in concurrently commenced but separate offers (each,
an "Offer" and, collectively, the "Offers") the outstanding notes of the
series described in the table below (the "Securities") for an aggregate
purchase price (excluding Accrued Interest (as defined in the Offer to
Purchase)) for all Offerors and all series of Securities of up to £1 billion
in cash (as such amount may be increased or decreased) (the "Maximum Tender
Amount")((1)).

 

 Issuer of    Title of                          Principal            CUSIP/ISIN               Acceptance  Early Tender Premium((2))  Reference Security / Rate              Bloomberg Reference Page/Screen  Fixed Spread (basis points)  Total Consideration ((2)(3))

Security /
Security
Amount Outstanding
Priority

Offeror
Level
 BATIF        2.250% Guaranteed Notes due 2052  £650,000,000         XS1488409977             1           £50                        UKT 3.750% due July 22, 2052           FIT GLT10-50                     175                          To be determined as described herein
 BATIF        4.000% Guaranteed Notes due 2055  £350,000,000         XS1324911608             2           £50                        UKT 4.250% due December 7, 2055        FIT GLT10-50                     180                          To be determined as described herein
 BATIF        2.000% Guaranteed Notes due 2045  €600,000,000         XS1203860934             3           €50                        2045 Notes Interpolated Mid-Swap Rate  IRSB EU  GO ((4))                145                          To be determined as described herein
 BATCAP       3.984% Notes due 2050             $1,000,000,000       05526DBU8/ US05526DBU81  4           $50                        UST 4.750% due November 15, 2053       FIT 1                            160                          To be determined as described herein
 BATCAP       3.734% Notes due 2040             $750,000,000         05526DBT1/ US05526DBT19  5           $50                        UST 4.500% due February 15, 2044       FIT 1                            155                          To be determined as described herein
 BATCAP       4.540% Notes due 2047             $2,500,000,000       05526DBF1/ US05526DBF15  6           $50                        UST 4.500% due February 15, 2044       FIT 1                            165                          To be determined as described herein
 BATCAP       4.758% Notes due 2049             $1,000,000,000       05526DBK0/ US05526DBK00  7           $50                        UST 4.750% due November 15, 2053       FIT 1                            170                          To be determined as described herein

 

 (1)    To determine whether the Maximum Tender Amount has been reached,
 where required, we will convert the applicable purchase price payable with
 respect to the Securities validly tendered into Sterling using the applicable
 exchange rate described under "The Terms of the Offers-Maximum Tender Amount;
 Acceptance Priority Levels and Proration" in the Offer to Purchase. The
 Maximum Tender Amount may be increased or decreased.

 (2)    Per $1,000, £1,000 or €1,000, as applicable, principal amount of
 Securities validly tendered at or prior to the Early Tender Deadline and
 accepted for purchase.

 (3)    For the avoidance of doubt, the Early Tender Premium is included
 within the Total Consideration (which, in the case of all Securities, will be
 calculated using the Fixed Spread over the relevant Reference Yield as
 described in the Offer to Purchase), and is not in addition to the Total
 Consideration. In addition, Holders whose Securities are accepted for purchase
 will also receive Accrued Interest on such Securities.

 (4)     Pricing Source: BGN.

The amount of each series of Securities that is purchased will be determined
in accordance with the acceptance priority levels specified in the table above
(the "Acceptance Priority Level"), with 1 being the highest Acceptance
Priority Level and 7 being the lowest Acceptance Priority Level, subject to
the Maximum Tender Amount.

The Tender Offers are being made upon and are subject to the terms and
conditions set forth in the Offer to Purchase, dated April 15, 2024 (the
"Offer to Purchase"). Terms not defined in this announcement have the meanings
given to them in the Offer to Purchase.

The Tender Offers will expire at 5:00 p.m., New York City time, on May 13,
2024, unless extended or earlier terminated (the "Expiration Date"). Tenders
of Securities may be withdrawn at any time at or prior to 5:00 p.m., New York
City time, on April 26, 2024, but may not be withdrawn thereafter, unless the
Offerors are required by applicable law to permit withdrawal.

The applicable Total Consideration or Tender Offer Consideration (as defined
below) to be paid for each series of Securities accepted for purchase will be
determined at 10:00 a.m., New York City time, on the business day following
the Early Tender Deadline (as defined below) (such time and date, as the same
may be extended, the "Price Determination Date"), which is expected to be
April 29, 2024. The applicable Total Consideration or Tender Offer
Consideration to be paid for the Securities will be determined in the manner
described in the Offer to Purchase by reference to the sum of the applicable
fixed spread and the applicable reference yield of the applicable Reference
Security or the 2045 Notes Interpolated Mid-Swap Rate, each as specified in
the table above (such sum being annualized in the case of the Sterling
Securities).

Holders of Securities who validly tender and not withdraw their Securities at
or prior to 5:00 p.m., New York City time, on April 26, 2024 (unless extended,
the "Early Tender Deadline") and whose Securities are accepted for purchase
will receive the applicable Total Consideration, which includes the applicable
early tender premium specified in the table above (the "Early Tender
Premium"). Holders of Securities who validly tender their Securities following
the Early Tender Deadline and at or prior to the Expiration Date and whose
Securities are accepted for purchase will only receive the applicable "Tender
Offer Consideration," which is equal to the applicable Total Consideration
minus the applicable Early Tender Premium.

The applicable Total Consideration or Tender Offer Consideration for
Securities denominated in U.S. Dollars, Sterling and Euro will be paid in U.S.
Dollars, Sterling and Euro, respectively. Acceptance of Securities with
reference to the Maximum Tender Amount will be determined subject to the
currency conversion methods described in the Offer to Purchase.

In addition to the applicable Total Consideration or Tender Offer
Consideration, as the case may be, accrued and unpaid interest from and
including the most recent interest payment date applicable to the relevant
series of Securities up to, but not including, the applicable Settlement Date
will be paid in cash on all validly tendered Securities accepted for purchase.

If the Maximum Tender Amount is not reached as of the Early Tender Deadline,
Securities validly tendered and not validly withdrawn at or prior to the Early
Tender Deadline will be accepted for purchase in priority to Securities
tendered following the Early Tender Deadline even if such Securities tendered
following the Early Tender Deadline have a higher Acceptance Priority Level
than Securities tendered at or prior to the Early Tender Deadline.

Securities of a series may be subject to proration if the aggregate principal
amount of the Securities of such series validly tendered and not validly
withdrawn would cause the Maximum Tender Amount to be exceeded. Furthermore,
if the Maximum Tender Amount is reached as of the Early Tender Deadline,
holders who validly tender Securities following the Early Tender Deadline will
not have any of their Securities accepted for purchase unless the Maximum
Tender Amount is increased.

Each Offeror's obligation to accept for payment and pay for the Securities
validly tendered in the Tender Offers is subject to the satisfaction or waiver
of the conditions described in the Offer to Purchase.

The Tender Offers are being undertaken to optimize the BAT Group's debt
capital structure, with the Offerors using available liquidity to reduce gross
and net debt in an efficient manner. Securities that are accepted in the
Tender Offers will be purchased by the applicable Offeror and retired and
cancelled and will no longer remain outstanding obligations of the applicable
Offeror.

Payment for Securities that are validly tendered and not validly withdrawn at
or prior to the Early Tender Deadline and accepted for purchase will be made
as soon as reasonably practicable following the Early Tender Deadline (such
date, the "Early Settlement Date"). The Offerors expect that the Early
Settlement Date will be May 1, 2024, the second business day after the Price
Determination Date. Payment for Securities that are validly tendered following
the Early Tender Deadline but at or prior to the Expiration Date and accepted
for purchase will be made promptly following the Expiration Date (such date,
the "Final Settlement Date"). The Offerors expect that the Final Settlement
Date will be May 15, 2024, the second business day after the Expiration Date,
assuming the Maximum Tender Amount of Securities is not reached on the Early
Settlement Date.

The Tender Offers may be amended, extended, terminated or withdrawn in whole
or with respect to any series of Securities without amending, extending,
terminating or withdrawing the Tender Offers with respect to any other series
of Securities. The Tender Offers are not conditioned on any minimum amount of
Securities being tendered. The Offerors reserve the right, subject to
applicable law, to: (i) waive any and all conditions to the Tender Offers;
(ii) extend or terminate the Tender Offers; (iii) increase or decrease the
Maximum Tender Amount; or (iv) otherwise amend the Tender Offers in any
respect.

Citigroup Global Markets Limited, Merrill Lynch International, NatWest Markets
Plc and SMBC Nikko Capital Markets Limited are acting as Dealer Managers in
connection with the Tender Offers. The information and tender agent is Global
Bondholder Services Corporation. Copies of the Offer to Purchase and related
offering materials are available via the Tender Offers website at
https://www.gbsc-usa.com/bata/ or by contacting the information and tender
agent in New York at +1 (212) 430-3774 (banks and brokers) or +1 (855)
654-2014 (U.S. Toll-Free) or by email at contact@gbsc-usa.com. Questions
regarding the Tender Offers should be directed to Citigroup Global Markets
Limited at +44 20 7986 8969 (London) or +1 (800) 558-3745 (U.S. Toll-Free) or
+1 (212) 723-6106 (U.S.) or by email at liabilitymanagement.europe@citi.com,
Merrill Lynch International at +44 207 996 5420 (Europe) or +1 (888) 292-0070
(U.S. Toll Free) or +1 (980) 387-3907 (U.S.) or by email at
DG.LM-EMEA@bofa.com, NatWest Markets at +44 20 7678 5222 (London) or +1 (800)
231-5380 (U.S. Toll Free) or +1 (203) 897 6166 (U.S.) or by email at
NWMliabilitymanagement@natwestmarkets.com or SMBC Nikko Capital Markets
Limited at +44 204 507 5043 or by email at
liability.management@smbcnikko-cm.com.

 

This announcement is for informational purposes only and shall not constitute
an offer to sell, a solicitation to buy or an offer to purchase or sell any
securities. The Tender Offers are being made only pursuant to the Offer to
Purchase and only in such jurisdictions as is permitted under applicable law.
Please see the Offer to Purchase for certain important information on offer
restrictions applicable to the Tender Offers.

 

This announcement is released by BAT and contains information that qualifies
as inside information for the purposes of Article 7 of the Market Abuse
Regulation (EU) No 596/2014 as it forms part of United Kingdom domestic law
("MAR"), encompassing information relating to the Tender Offers described
above. For the purposes of MAR, this announcement is made by Caroline Ferland,
Company Secretary.

 

Forward-Looking Statements

Statements included in this announcement and the Offer to Purchase regarding
the future expectations of BAT and its subsidiaries (the "BAT Group"),
beliefs, plans, objectives, financial conditions, assumptions or future events
or performance that are not historical facts are forward-looking statements,
including "forward-looking" statements made within the meaning of the U.S.
Private Securities Litigation These statements are often, but not always, made
through the use of words or phrases such as "believe," "anticipate," "could,"
"may," "would," "should," "intend," "plan," "potential," "predict," "will,"
"expect," "estimate," "project," "positioned," "strategy," "outlook," "target"
and similar expressions. These include statements regarding our intentions,
beliefs or current expectations concerning, amongst other things, our results
of operations, financial condition, liquidity, prospects, growth, strategies
and the economic and business circumstances occurring from time to time in the
countries and markets in which the BAT Group operates. All such
forward-looking statements involve estimates and assumptions that are subject
to risks, uncertainties and other factors. It is believed that the
expectations reflected in this announcement are reasonable, but they may be
affected by a wide range of variables that could cause actual results and
performance to differ materially from those currently anticipated. Among the
key factors that could cause actual results to differ materially from those
projected in the forward-looking statements are uncertainties related to the
following: the impact of competition from illicit trade; the impact of adverse
domestic or international legislation and regulation; the inability to
develop, commercialise and deliver the BAT Group's New Categories strategy;
the impact of supply chain disruptions; adverse litigation and dispute
outcomes and the effect of such outcomes on the BAT Group's financial
condition; the impact of significant increases or structural changes in
tobacco, nicotine and New Categories related taxes; translational and
transactional foreign exchange rate exposure; changes or differences in
domestic or international economic or political conditions; the ability to
maintain credit ratings and to fund the business under the current capital
structure; the impact of serious injury, illness or death in the workplace;
adverse decisions by domestic or international regulatory bodies; changes in
the market position, businesses, financial condition, results of operations or
prospects of the BAT Group; direct and indirect adverse impacts associated
with Climate Change and the move towards a Circular Economy; and Cyber
Security caused by the heightened cyber-threat landscape and the increased
digital interactions with consumers, and changes to regulation; and risks
related to other factors discussed or incorporated by reference in the Offer
to Purchase, including in the sections captioned "Group Principal Risks" and
"Group Risk Factors" in the 2023 Form 20-F (as defined in the Offer to
Purchase).

Past performance is no guide to future performance and persons needing advice
should consult an independent financial adviser. The forward-looking
statements in this announcement and the Offer to Purchase reflect knowledge
and information available at the date of the document and the BAT Group
undertakes no obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise. Readers
are cautioned not to place undue reliance on such forward-looking statements.
All subsequent written or oral forward-looking statements attributable to BAT
or any person acting on its behalf are expressly qualified in their entirety
by the cautionary statements contained or referred to in this section of the
announcement.

 

United Kingdom

The communication of this announcement, the Offer to Purchase and any other
documents or materials relating to the Tender Offers is not being made, and
such documents and/or materials have not been approved, by an authorised
person for the purposes of section 21 of the Financial Services and Markets
Act 2000, as amended (the "FSMA"). Accordingly, such documents and/or
materials are not being distributed to, and must not be passed on to, the
general public in the United Kingdom. The communication of such documents
and/or materials is exempt from the restriction on financial promotions under
section 21 of the FSMA on the basis that it is only directed at and may only
be communicated to (1) those persons who are existing members or creditors of
the Offerors or other persons falling within Article 43 of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Financial Promotion Order") and (2) any other persons to whom these
documents and/or materials may otherwise lawfully be communicated under the
Financial Promotion Order.

 

Belgium

The Tender Offers do not constitute a public offering within the meaning of
Articles 3, §1, 1° and 6, §1, of the Belgian Takeover Law. The Tender
Offers are exclusively conducted under applicable private placement exemptions
and have therefore not been, and will not be, notified to, and none of this
announcement, the Offer to Purchase and any other document or material
relating to the Tender Offers have been, or will be, approved by the Belgian
Financial Services and Markets Authority (Autorité des Services et Marchés
Financiers / Autoriteit voor Financiële Diensten en Markten). Accordingly,
the Tender Offers, this announcement, the Offer to Purchase, any memorandum,
information circular, brochure or any similar documents relating to the Tender
Offers may not be advertised, offered or distributed, directly or indirectly,
to any person located and/or resident in Belgium other than to persons who
qualify as "Qualified Investors" in the meaning of Article 2(e) of the
Prospectus Regulation, as referred to in Article 6, §3 of the Belgian
Takeover Law, and who is acting for its own account, or in other circumstances
which do not constitute a public offering in Belgium pursuant to the Belgian
Takeover Law. This announcement and the Offer to Purchase have been issued
only for the personal use of the above Qualified Investors and exclusively for
the purpose of the Tender Offers. Accordingly, the information contained
herein and therein may not be used for any other purpose or disclosed to any
other person in Belgium.

 

France

The Tender Offers are not being made, directly or indirectly, to the public in
France. This announcement, the Offer to Purchase and any other documents or
offering materials relating to the Tender Offers have only been, and shall
only be, distributed in France toqualified investors (investisseurs
qualifiés) as defined in Article 2(e) of the Prospectus Regulation. None of
this announcement, the Offer to Purchase and any other documents or offering
materials has been or will be submitted to the clearance procedures (visa) of
the Autorité des marchés financiers.

Italy

None of the Tender Offers, this announcement, the Offer to Purchase or any
other documents or materials relating to the Tender Offers has been or will be
submitted to the clearance procedure of the CONSOB, pursuant to applicable
Italian laws and regulations.

The Tender Offers are being carried out in Italy as exempted offers pursuant
to article 101-bis, paragraph 3-bis of the Financial Services Act and article
35-bis, paragraph 4 of CONSOB Regulation No. 11971 of May 14, 1999, as
amended. Holders or beneficial owners of the Securities that are a resident of
and/or located in Italy can tender the Securities for purchase through
authorized persons (such as investment firms, banks or financial
intermediaries permitted to conduct such activities in Italy in accordance
with the Financial Services Act, CONSOB Regulation No. 20307 of February 15,
2018, as amended, and Legislative Decree No. 385 of September 1, 1993, as
amended) and in compliance with applicable laws and regulations and with any
requirements imposed by CONSOB or any other Italian authority.

Each intermediary must comply with the applicable laws and regulations
concerning information duties vis-à-vis its clients in connection with the
Securities or the Tender Offers.

Enquiries:

 Investor Relations
   Victoria Buxton/Amy Chamberlain/John Harney/Jane Henderson

   +44 (0) 20 7845 2012/1124/1263/1117

 Press Office
   +44 (0) 20 7845 2888 (24 hours) | @BATPlc

 

 

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