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SetitrniliM•r (y, 196$' The .lfost Usnful' Putu•r-TOBA'CCO-11 United Kingdom reparf . . . r Godfrey Phillips would broaden PM; Player-Wills' dire promotion squelched BY RICHARD SMITH, U-K. Editor LONDON, ENGt ANn. - Frustrated in its endeavors to gain control of the British Gallaher Group, Philip Morris has made a£ 11.5 million cash bid for the shares of another U.K. tobacco group;, Godfrey Phillips., Announcing details of the deal in London, however, George Weissman, president of Philip Morris, said that the timing had nothing to dowith'the fact that his company had been over- bid hti American Tobacco and had therefore failed in its effort to control Gallaher. Talks with Godfrey Phillips, he said, had been going,on for around two years. It was perhaps inevitable that Philip \Iorris should eventualliy takeoverthe Ri-itisli concern. The two companies have been closel vassociated for some years by way of manufacturing and marketing agreements. • Solid background - Godfrey Phil- lips is a fairly small group which was founded as a small cigar-making factory in London in 1844 and has always been run by familw interests. The company makes cigarettes under the names Ab- du11a and! de Reszke, and also manu- factures Boars Head tobacco. Some time ago it virtuallv dropped out of the very competitive U.K. mar- ket to concentrate on overseas expansion and this has proved to be a sound and profitable policy. The company now has substantial interests abroad and is par- tic•ularly strong ini Australia (where it has around 15 per cent of the market); New Zealand, India, Pakistan and Ceylon, Nearly nine-tenths,of the profits come from overseas. Ohviouslv, thens acquisition of this smallish,, but important, Britishi com- pany will give Philip Morris an import- ant boost in international markets even though it will do little to further the American firm's ambitions to: obtain a stakeiio the U.K. home trade:The directors of Godfrey Phillips have alreadv sold their holdings, rep- resenting a total of 36' per cent of the voting power, to Philip~ Morris and recommend'r their shareholders to do the same, so~there seems to be little reason to donl,t rhP ciirrrcc nf this venture. r\ Ply A1phttt Itl:qui.rrr PHILADELPHIA, PA'. D. 516,640 SUN. 936,135 AU6 2 0 1958 4e-1- !Philip Morris ;VIII Purchase British Firm . , ~ ~ NEW YORkAug 19 •(AP).- ~ Philip 3Lorris _Inc., has an- n uno ee ran agreement to ac- N quire Godf'Niy Phillips. Ltd:• a LoiidQn toii4eco firm, for about ~ $273 m`lllibn. " Philip l±orris said Monday it had a ''firm agreement" to N purchase .839,625 of Godfrey Phillips' R-f1,623 24•cent par val- ~ ue. common shares for $1.74 a share or about $1 5 million; ~ In addition. Philip 9forrris said it plans an offer for the British company's 1,495.827 $2.40 par value common shsres at $17.40 a share or about $26 million. Total commom shares outstanding is 2.337,452. Directors of Godfrey Phillips said'.in Londom they regard the $17.40 a share o`fer to be "fair- and reasonable." They said they intend to accept im respect to their own holdings and «•ill! strongly recommend other hold• ers to.do likewise. Last June Philip Morris made. an offer to acquire Gallaher; Ltd., anntL•er British tobacco concern, hut finally withdrew' its bid after America' Tobacco' Co. made a counter offer forf, Gallaher at a, higher price 'i. The ~D~troit94News ~ ~ .. * a ~..?~ . ~ti LDN${31iF -- f~CP1' «=;'Plt~i e Anleri~ttti. ~ ~are comQAnY, aa at:da a-~a d of 0 6 uullion * o' ~ iover ~Ie Brntuti tobacco •firm . of God- fcey, Phillips, , makers of' 1Vfu- : ratti •and Abtiuf la. cigarets., -' ' A jrsint statement issued'by the two = compa>ites i a`'r'd: "Terms ha,~e °been agreed 1br the acquisition by'Philip MOr- ria for cash of=the whole of the issued ordinary`share cap- it4.t of,Godfrey Phillips."- " ~'he American c o m p a~s y hgreed to buy 839;i;25 ordin}zy a shares at •-28 cents each; ~ ~f~; of if.4iS million. ~i'he ahttres, mainly hsld by: fan6iily directors of thiekBi'itish fil"knt, r^present 36 pe~cen! of :the votes of the orl~ineti~ capu~al. I Philip Morris also_affered to l buy all outstandiag qne-po~lad ($2 40) ordtna~jy stoc~ _units.'• Opdfrey Phillipa r,haa inaer- ests in the United &tatesj1 tobacco„ 'gieetinR cprd 4tld- printing busuiesses, It has af- filiated compaitii~s' Atid inter ests. in Australta, New Zea-~ land, . India, Pakistan, Ceylon and Malaysia. It riianufaca tures., Viscount, -,, .BI$ck and Whit'e, Murattiari"Aiabassador an other cigarets and to- ba~o products: e statement said assur- and>'s, had beeti - receiwed -thlnt British government eutrenby excliange- control'authorities would'coneent to the deal. '-1; . Philip Morris earGer ' failed in a bid~ to buy control' of t6e giant British Gallahers- firm that manufactures S e a i a r Seryice cizarets. _ ~ 1