Imperial Brands selling premium cigar business.

[wineguy]

https://finance.yahoo.com/news/imperial-brands-plans-sell-worldwide-143526338.html

 

[NSXCIGAR]

I think this refers to the Imperial subsidiary "Premium Cigars" which seems to be involved in the NC manufacturing industry. 

 

[Lotusguy]

I think this refers to the Imperial subsidiary "Premium Cigars" which seems to be involved in the NC manufacturing industry. 
 

It explicitly includes their stake in HSA. That’s a surprise!

[BarryVT]

http://www.cigaraficionado.com/article/imperial-brands-selling-its-premium-cigar-business

[Puros Y Vino]

50% of Habanos SA up for sale eh?  Anyone want to do a group buy?  Maybe we can get more "long and skinnies" back into the portfolio?   

[Guest Nekhyludov]

34 minutes ago, bundwallah said:

50% of Habanos SA up for sale eh?  Anyone want to do a group buy?  Maybe we can get more "long and skinnies" back into the portfolio?   

I'm in.

I have 25 ... no, check that, 27USD to chip in. Now we just need to come up with the remaining $22,399,999,973.00.   

[SOFLO88]

Im down. Put me in for $32.50 USD

[JoeyBones777]

16 minutes ago, Nekhyludov said:

I'm in.

I have 25 ... no, check that, 27USD to chip in. Now we just need to come up with the remaining $22,399,999,973.00.   

Maybe they would consider breaking off the HSA stake separately. ?

[CigarScentedBeard]

18 minutes ago, JoeyBones777 said:

Maybe they would consider breaking off the HSA stake separately. ?

Will they consider trades for paper?

[Burningman]

Time to break the piggy bank open. I'm all in on the deal!

[CaptainQuintero]

Could be incredibly significant, if we look back at your much influence Imperial has had on the CC world in the last couple of decades this has the potential to be either business as usual or a huge change

[Wookie]

If they'll take paper I'd be a guarantor

[bsubtown]

1 hour ago, CaptainQuintero said:

Could be incredibly significant, if we look back at your much influence Imperial has had on the CC world in the last couple of decades this has the potential to be either business as usual or a huge change

Just last week I did some investigating into Imperial and their ownership in HSA. From what I could gather they had a HUGE influence in the quality controls and consistency we have been seeing in Habanos. I am anxious to see where this goes and if the new owner is interested in continuing that work or increasing profits at the expense of quality. 

[El Presidente]

They have had enough .....and who can blame them 

[CaptainQuintero]

2 hours ago, bsubtown said:

Just last week I did some investigating into Imperial and their ownership in HSA. From what I could gather they had a HUGE influence in the quality controls and consistency we have been seeing in Habanos. I am anxious to see where this goes and if the new owner is interested in continuing that work or increasing profits at the expense of quality. 

  Supposedly they were the ones behind the deletions/trimming of the 'excess cigars' and the move to the world of blingy too. Or at least showed the idea of it to HSA. It's just what I heard so might be untrue but the timings run about right.

  Maybe a new partner will want to go in a completely new direction again.

[bsubtown]

29 minutes ago, CaptainQuintero said:

  Supposedly they were the ones behind the deletions/trimming of the 'excess cigars' and the move to the world of blingy too. Or at least showed the idea of it to HSA. It's just what I heard so might be untrue but the timings run about right.

  Maybe a new partner will want to go in a completely new direction again.

I read that as well. I am new to CC so I don't have a frame of reference outside of the opinion of others about quality improvements and missing cigars. It seems that few are immune to the draw of a second band and the idea that something is limited. I am firmly in this camp btw. 

 

I do wonder about the timing of the price increases and the sale. 

[NSXCIGAR]

1 hour ago, El Presidente said:

They have had enough .....and who can blame them 

That's what's scary. This is a profitable enterprise. They're only in it for 500M and it grosses that much every year. Either Imperial is in big trouble or something else is going on. 

I would be very cautious before going into business with Cuba in any capacity at this point. Cuba isn't in the best place economically as it is. What if a worldwide recession hits in the next 5 years and a starving Cuba decides to grab back any stake in HSA? 

Imperial may be getting out when the getting's good. That 50% stake is probably worth 3-4 billion at this point. And I would imagine the current HSA/Imperial staff is included, so I doubt much will change for a while following the sale. 

[El Presidente]

8 minutes ago, NSXCIGAR said:

Imperial may be getting out when the getting's good. That 50% stake is probably worth 3-4 billion at this point. And I would imagine the current HSA/Imperial staff is included, so I doubt much will change for a while following the sale. 

Your JV partner is incompetent. 

Political Risk has to be high. 

The HSA business grossed.....$573 million.   What's the net?  You are only entitled to half.  3-4 Billion is a stretch. 

If Scandinavian Tobacco Group  pick it up (General cigar/cigars international/Thompson cigars)  trademark issues almost disappear and they have long term online strategy locked in. 

[Guest Nekhyludov]

The new U.S. policy of allowing lawsuits against non-Cuban entities that do business with the Cuban government or own confiscated property seems to mean that Imperial will almost certainly be sued. That policy takes effect on Thursday.

I can't imagine which potential buyers would be excited by the prospect of long, expensive litigation. Maybe China Tobacco?

[PigFish]

7 hours ago, bundwallah said:

50% of Habanos SA up for sale eh?  Anyone want to do a group buy?  Maybe we can get more "long and skinnies" back into the portfolio?   

... I think you might have a better investment in playing darts in the pub or betting red or black on a bent roulette wheel!

Just sayin'...!

I cannot imagine the frustration of having the Cuban government as a partner...! As consumers however, maybe they will be selling more backdoor Habanos to support their Red brother down in Venezuela. I mean what is a little cheating on the inventory... between friends!

-Piggy

[Lotusguy]

If Hansotia (of Gurkha fame) buys it, we are all doomed

[NSXCIGAR]

5 hours ago, El Presidente said:

Your JV partner is incompetent. 

Political Risk has to be high. 

The HSA business grossed.....$573 million.   What's the net?  You are only entitled to half.  3-4 Billion is a stretch. 

Yes, I misspoke. 3-4B for the whole shebang, 100%. So 1.5-3B for the 50%. 

And that's valuation--not necessarily what the actual value is. You're correct--incompetent partner, political risk. I suspect the actual value of that stake is around 1B--maybe a tad under. And I wouldn't recommend anyone put that Billion down unless they were prepared to lose it. 

5 hours ago, Nekhyludov said:

The new U.S. policy of allowing lawsuits against non-Cuban entities that do business with the Cuban government or own confiscated property seems to mean that Imperial will almost certainly be sued. That policy takes effect on Thursday.

If Scandinavian picks it up it's not much of an issue. Altadis already owns half the marcas and General most of the others. 

Perhaps this is exactly why Imperial is ditching it. They don't want a fight with Scandinavian or Cuba. If Scandinavian picks it up it solves everyone's problem.