Exhibit 4.16


 


	
   

  	
  Imperial Tobacco Group PLC

  
	
   

  	
  PO Box 244

  
	
   

  	
  Upton Road

  
	
   

  	
  Bristol BS 99 7UJ

  
	
   

  	
  UNITED KINGDOM

  



 


The Directors


Altadis, S.A.


Eloy Gonzalo, 10


28010 Madrid


	
  SPAIN

  	
   

  	
   

  	
      18 July 2007

  



 


Dear Sirs


 


Following our
previous proposals and further to our discussions relating to the proposed
tender offer (the Offer) by
Imperial Tobacco Group PLC (Imperial Tobacco)
(or a wholly owned subsidiary of Imperial Tobacco (BidCo)) for all the shares in Altadis, S.A. (Altadis), this letter records the terms and conditions under
which Imperial Tobacco and Altadis will now proceed in relation to the Offer.


 


1.             IMPERIAL TOBACCO’S OBLIGATIONS


 


Subject to
Imperial Tobacco delivering a signed copy of this letter to Altadis and
Imperial Tobacco receiving a signed copy of this letter from Altadis (Signing), Imperial Tobacco agrees that:


 


(a)           Submission of CNMV filing – before 9.00am (Madrid time) on the business
day after Signing, Imperial Tobacco will submit (or cause BidCo to submit) to
the Comisión Nacional del Mercado de Valores
(CNMV) a request for authorisation of
the Offer, together with an explanatory offer prospectus (Folleto Explicativo de la Oferta) (the Offer Document)  and such other documentation as is required by the Spanish
tender offer regulations. The Offer shall include the following principal
terms:


 


(i)            the
Offer will be made for 100% of the share capital of Altadis (other than any
treasury shares) and will be made at a cash price of € 50 per Altadis share
(the Offered Price);


 


(ii)           the
Offer will be subject to authorisation by the CNMV and approval of the Imperial
Tobacco Resolution (as defined below) at the Imperial Tobacco EGM (as defined
below);


 


(iii)          the
Offer will be subject only to the fulfilment (or waiver by Imperial Tobacco or
BidCo) of the following conditions before the expiration of the period for
acceptance of the Offer:


 


a)         acceptance
thereof by a number of shares of Altadis that represent at least 80% of its share
capital (or such higher percentage as shall be permitted by the CNMV from time
to time);


 


b)         the shareholders’
meeting of Altadis adopting a resolution to amend its by-laws in order to
remove the limitation on the number of votes that Altadis shareholders can cast
at a general meeting of shareholders and to remove any other restrictive
provisions introduced into those by-laws after Signing (the Amendment Resolution) and that such
amendment is registered in the Madrid Mercantile Registry;


 

















 


c)         conditions relating
to antitrust clearances in the European Union, the United States of America and
any other relevant jurisdiction, in each case only to the extent permitted by the
CNMV from time to time; and


 


d)         any other
condition or conditions included and accepted by the CNMV in any Competing
Offer (as defined in sub-paragraph 1(d)) filed by a third party with the CNMV,
to the extent Imperial Tobacco or BidCo is permitted by  the CNMV from time to time to include such
condition or conditions in the Offer.


 


(iv)         The
Offer Document will also contain statements to the effect of the statements referred
to in sub-paragraphs 1(c)(ii) and 1(c)(iii).


 


A copy of the
Offer Document in substantially the same form as is to be submitted by Imperial
Tobacco to the CNMV has been initialled by the parties (or on their behalf) for
the purposes of identification.


 


(b)           Publication of Imperial
Tobacco’s Announcement –
it will deliver to the CNMV for immediate publication a relevant fact (hecho relevante) making public the filing
of the Offer Document and setting out the price and certain other terms and
conditions of the Offer (Imperial Tobacco’s
Announcement), substantially in the form attached as annexure 1, by
9.00 am (Madrid time) on the business day after Signing;


 


(c)           Posting of Circular –
on the business day after Signing, it will submit, to the UK Listing Authority,
a final version of the circular to the shareholders of Imperial Tobacco (a copy
of relevant sections of such circular relating to the Offer have been
initialled by the parties (or on their behalf) for the purposes of
identification) seeking the approval, at an extraordinary general meeting
(including any adjournment thereof) (the Imperial Tobacco EGM),
of the resolution (the Imperial Tobacco
Resolution) required by applicable law and the UK Listing Rules in
connection with the Offer (the Circular),
and, within 2 business days after the UK Listing Authority’s approval of the
Circular, will post the Circular to the shareholders of Imperial Tobacco, which
Circular shall contain statements to the following effect (and Imperial Tobacco
undertakes to carry such statements in sub-paragraph (ii) and (iii) into effect
following the successful completion of the Offer):


 


(i)         “Your Board considers the
Proposed Acquisition and the Resolution to be in the best interests of the
Company and its Shareholders as a whole and, accordingly, your Board recommends
Shareholders to vote in favour of the Resolution, as the Directors intend to do
in respect of their own beneficial shareholdings.”;


 


(ii)        “Mr
Vázquez will be offered an executive position on the board of directors of Imperial
Tobacco and an executive role as chief executive officer of the Enlarged Group’s
cigar and logistics businesses. We will invite Mr Comolli to become the
non-executive deputy chairman of Imperial Tobacco and to provide certain
consultancy services.


 


In addition, the Altadis board will be requested to
submit one of their current non-executive directors to be invited to join the
Imperial Tobacco board as a non-executive director. At a later date, other
former non-executive Altadis directors may, in certain circumstances, be
invited to join the Imperial Tobacco board as non-executive directors. Any such
appointments would be subject to the approval of the Imperial Tobacco board’s
nominations committee.


 

















 


Following completion of the Offer, the headquarters of
the cigar division and the logistics business will remain in Madrid, and the Enlarged
Group will also maintain a substantial presence in Paris”; and


 


(iii)       “Imperial Tobacco
takes the view that one of the major benefits of the Proposed Acquisition going
forward is that the skills and talents of Altadis’ employees will be available
to the Enlarged Group. Imperial Tobacco has a long history of excellent human
resources practice and procedures based on the principles of equal opportunity
and committed investment in its workforce at all levels. Imperial Tobacco’s
policy of role selection based on merit wherever possible will continue to be
applied within the Enlarged Group. In keeping with Imperial Tobacco’s policy,
Imperial Tobacco is committed to honouring Altadis’s employees’ remuneration
entitlements, contractual arrangements and social plans on terms no less
favourable overall than currently in place in Altadis.”;


 


(d)           Competing tender offer - in
the event that a third party files with the CNMV a competing tender offer which
is, on the date of filing, at a price per Altadis share greater than the
Offered Price (Competing Offer),
then nothing in paragraph 1 shall oblige Imperial Tobacco, its board or any of
the Imperial Tobacco directors to (A) post the Circular or (B) make or
maintain and not withdraw, modify or qualify the recommendation that
shareholders vote in favour of the Imperial Tobacco Resolution;


 


(e)           Imperial Tobacco
confirmations – Imperial Tobacco also makes
the following confirmations:


 


Subject
to the successful completion of the Offer:


 


(i)         the operational
headquarters of the cigar business and the logistics business will be based in
Madrid as will the Spanish sales and marketing operations. The cigar COO and
the logistics COO will report to the cigar and logistics business CEO pending
any decisions the cigar and logistics business CEO and the group CEO make on
the appropriate operating structure and support levels for those businesses;


 


(ii)        the French sales
and marketing operations, the French logistics operations plus Africa and
Middle East region headquarters will be located in Paris, enabling significant
management presence with the appropriate operating structure and support levels
to be established during the process of integration;


 


(iii)       the names of
Altadis and Seita will be retained as corporate names within the enlarged group
and will be used where it is most appropriate, efficient and of greatest commercial
benefit in the best interest of the enlarged group. Over time, as the group
continues to evolve and develop, the names of entities, etc., will, no doubt,
be subject to change where that is felt necessary. For the avoidance of doubt
or confusion, where and when the names of Altadis and Seita are predominant
(e.g. in administration materials, etc.) then the suffix “a member of Imperial
Tobacco Group PLC” should be used.


 


2.             ALTADIS’S OBLIGATIONS


 


Subject to
Signing and provided that Imperial
Tobacco has submitted to the CNMV a request for authorisation of the
Offer in accordance with paragraph 1(a), Altadis agrees that:


 


(a)           References to Altadis – it
consents to the inclusion of the references to it and to a statement to the
following effect:


 

















 


“Altadis has confirmed to Imperial Tobacco that it considers that the
Offer is attractive and that, in the absence of a competing offer at a higher
price being filed with the CNMV, the Board of Altadis will recommend the Offer
to Altadis’ shareholders and the directors of Altadis intend to accept the
Offer in respect of their own beneficial shareholdings”;


 


in Imperial Tobacco’s Announcement and in the Circular;


 


(b)           Publication of Altadis’s Announcement – it will deliver to the CNMV for immediate
publication an announcement, substantively in the form attached as annexure 2,
relating to the Offer, which announcement will contain the recommendation wording set out in
paragraph 2(a) above (Altadis’s Announcement)
by 9.00 am (Madrid time) on the business day after Signing;


 


(c)           Recommendation of the Offer –
subject to paragraph 2(d), the board of directors of Altadis will recommend
(the Directors’ Recommendation), in the detailed report of the board on the Offer (the Informe detallado del órgano de administración sobre la oferta pública
de adquisición), that Altadis shareholders
(i) accept the Offer (using wording substantially as set out in paragraph 2(a)
above) and (ii) vote in favour of the Amendment
Resolution;


 


(d)           Changes to the Directors’
Recommendation – it will procure that no
director of Altadis will, before the end of the acceptance period for the Offer
(i) withdraw, modify or qualify, or propose to
withdraw, modify or qualify, in a manner adverse to the Offer, the Directors’
Recommendation or (ii) approve or recommend, or propose to approve or
recommend, any Alternative Proposal; provided, however, that nothing
will prevent any director of Altadis from taking any of the actions in (i) or
(ii) if a third party files with the CNMV a Competing Offer; provided further,
however, that if Imperial Tobacco submits the final highest price in the sealed
bid process, the directors of Altadis will renew the Directors’ Recommendation;


 


(e)           Convening the
Altadis EGM – it will, as soon as
reasonably practicable and by no later than 10 days after the date on which the
acceptance period of the Offer begins, convene a meeting of its shareholders
(including both a first call of such meeting and, in the event the quorum
requirements are not met, a second call of such meeting for the day following
the date of the first call) to be held within the minimum period permitted by
Spanish law to consider the Amendment Resolution (the Altadis EGM); such Altadis EGM shall be
held before the end of the acceptance period for the Offer;


 


(f)            Quorum for the
Altadis EGM – it will use all
reasonable endeavours to procure that the applicable shareholder quorum
requirements in Altadis’s by-laws are satisfied in connection with the Altadis
EGM (provided, however, that Altadis (i) will not, without Imperial Tobacco’s
prior written consent, offer to pay to Altadis shareholders (prima de asistencia) any amount for each
Altadis share attending the Altadis EGM and (ii) will, if requested by Imperial
Tobacco in writing to do so and provided that no third party files with the
CNMV a Competing Offer, offer to pay to Altadis shareholders (prima de asistencia) a reasonable amount
for each Altadis share attending the Altadis EGM; provided further, however,
that if a third party files with the CNMV a Competing Offer, and Imperial
Tobacco submits the final highest price in the sealed bid process, Altadis’s
obligations to pay such fee, if requested by Imperial Tobacco, will be renewed).
It will also do all other things necessary to put the Amendment Resolution, if
approved by the Altadis EGM, into full force and effect before the end of the
acceptance period for the Offer (including registering the Amendment Resolution
with the Madrid Mercantile Registry);


 


(g)           Assistance with the Circular, anti-trust,
rating agency, options and logistics processes –


 


(i)         Circular, rating agencies and options - it
will promptly provide to Imperial Tobacco or as directed by Imperial Tobacco
any assistance reasonably requested by Imperial Tobacco in connection with (A)
the preparation of the Circular (and the inclusion in it of reasonable 


 

















 


information about Altadis required by applicable law or the UK Listing
Rules), (B) Imperial Tobacco’s discussions with Standard and Poors (S&P) and Moodys connected to the Offer (including,
without limitation, providing any reasonable consent requested by S&P or
Moodys which is necessary in order for either S&P or Moodys to carry out or
provide a ratings assessment in relation to the combined group (that is, the
corporate group that will exist if the Offer is successful)) and (C) the seeking
of the exercise of all options granted under the Altadis option plan, or the
cancellation of all such options in exchange for a cash payment based on the
difference between the Offered Price and the relevant exercise price for such
options, in either case before the end of the acceptance period for the Offer;


 


(ii)        Anti-trust - it will promptly provide
(A) to Imperial Tobacco or as directed by Imperial Tobacco any assistance
reasonably requested by Imperial Tobacco in connection with the obtaining of
any competition clearances or anti-trust approvals connected to the Offer and
(B) to any governmental or regulatory authority (including, without
limitation, the CNMV, the European Commission, the Federal Trade Commission and the
Antitrust Division of the Department of Justice), any information
or assistance requested by it, in accordance with applicable law or regulation,
or such authority’s legally permitted procedures, in connection with the Offer;
and


 


(iii)       Logistics re-organisation – it will promptly provide
Imperial Tobacco with such information relating to the French logistics
re-organisation, as announced on 21 February 2007, (including, without
limitation, information relating to any tax clearances or rulings) as may
reasonably be requested by Imperial Tobacco in connection with the Offer
(including any follow-on actions relating to Compañía de
Distribución Integral Logista, S.A. (Logista) required by
Spanish law or regulation or by the CNMV) and it will inform Imperial Tobacco reasonably
in advance in relation to the timing and nature of any further steps in
relation to the French logistics re-organisation;


 


(h)           No further dividends/share
capital changes – it will not, before the
settlement of consideration in connection with the Offer or six months from the
date hereof, whatever takes place first, recommend, declare, announce, pay,
make or propose the recommendation, declaration, announcement, payment or
making of, any dividend, bonus issue, return of capital or other distribution
(other than (i) any dividend declared in the ordinary course of business on or
after the date of this letter (provided that the Offer price shall be reduced
to take full account of such dividend) and (ii) any prima de asistencia paid in accordance with paragraph 2(f));
nor alter, increase or decrease the authorised, allotted or issued share
capital of Altadis or any member of the group consisting of Altadis and all of
its direct or indirect subsidiaries (the Altadis
Group), nor grant any options or other rights conferring a right to
subscribe for, or to otherwise receive, any Altadis shares or shares in the
capital of any member of Altadis Group, except (a) pursuant to the free shares
programme approved by Altadis’s
shareholders meeting in 2005 and any other similar programme of Logista, in
either case  only as regards phase III of
such programmes; or (b) the capital increases required to perform the cigar and
French logistics re-organisation in the manner announced on 21 February 2007
and, in particular, the capital increase in Logista required by the
contribution in kind of the French logistic business;


 


(i)            Treasury shares – it will complete the cancellation
process of its treasury shares as soon as reasonably practicable after Signing. Until such
cancellation occurs, it will immobilise such treasury shares and will, if requested by Imperial Tobacco, provide to the CNMV, on or before
the date on which the Offer Document is filed with the CNMV, an immobilisation
certificate (certificado
de inmovilización) relating to such treasury shares and/or any other documentation that
the CNMV may require in order to verify that the treasury shares will not be
tendered to the Offer;


 

















 


(j)            No third party
cost coverage, break fees or inducement fees – it will not,
and will procure that no member of the Altadis Group shall, on and from
Signing, enter into any agreement providing for the reimbursement of costs or
payment of break fees or inducement fees (or similar or equivalent fees) with
any party in connection with any Alternative Proposal;


 


(k)           No frustrating
action – it will, and will procure that all members
of the Altadis Group will, from the date of this letter until the end of the
acceptance period for the Offer, carry on its or their business or businesses
in the ordinary and usual course and it will not, and will procure that no
member of the Altadis Group will, take any action or omit to take any action
which delays or is prejudicial to the successful outcome of the Offer, other
than as permitted by applicable law or regulation;


 


(l)            Provision of information –


 


(i)         it represents and warrants
that, in connection with any Alternative Proposal, it has not, and no member of
the Altadis Group has, directly or indirectly, provided non-public information
(in either written or oral form, electronically stored or otherwise) relating
to Altadis or any member of the Altadis Group (Confidential Information) (A) to any other manufacturer of
tobacco products (or to any member of the corporate groups of which such
manufacturer forms part) (each a Relevant
Person) other than Confidential Information of substantially the
same type, quality and level of detail as the Confidential Information provided
to Imperial Tobacco before the date of this letter (the Relevant Information)
or (B) to any third party (including any Relevant Person) other than in
circumstances where Altadis has entered into an agreement in connection with
any Alternative Proposal (Pre-existing Agreement)
with such third party;


 


(ii)        it represents and
warrants that it has not, and no member of the Altadis Group has, directly or
indirectly, entered into any Pre-existing Agreement with any third party which
allows any party thereto to provide, directly or indirectly, any Confidential
Information to any Relevant Person (or, if such third party is a Relevant
Person, to any other person), nor has it, or any member of the Altadis Group,
amended, waived or released (or acquiesced in the breach of) any term or
condition of any Pre-existing Agreement in such a way as would allow any party
thereto to provide, directly or indirectly, any Confidential Information to any
Relevant Person (or, if such third party is a Relevant Person, to any other
person);


 


(iii)       it will not, and
will procure that no member of the Altadis Group will, provide, directly or
indirectly, any Confidential Information to any Relevant Person in connection
with any Alternative Proposal other than Relevant Information;


 


(iv)      it will not, and
will procure that no member of the Altadis Group will, directly or indirectly,
enter into any new agreement with any third party in connection with any
Alternative Proposal (New Agreement),
nor amend, waive or release (or acquiesce in the breach of) any term or
condition of any Pre-existing Agreement or any New Agreement, in each case in
such a way as would allow any party thereto to provide, directly or indirectly,
, any Confidential Information to any Relevant Person (or, if such third party
is a Relevant Person, to any other person) in connection with any Alternative
Proposal;


 


(v)        it represents and warrants that all
Pre-existing Agreements (with any Relevant Person or other third party) contain
provisions prohibiting (A) the acquisition or proposed acquisition, directly or
indirectly, by such third party (or its affiliates, directors, officers,
employees, advisors, agents or representatives (Representatives))
or any person controlled by it of any securities or property of Altadis or any
member of the Altadis Group (other than through a takeover bid for 100% of the
share capital of Altadis or pursuant to other exceptions in substantially the
same form as those in the Pre-existing Agreement between Altadis and 


 

















 


Imperial Tobacco); (B) the entering into by such third party or its
Representatives or any person controlled by it of (or a proposal by such third
party or its Representatives or any person controlled by it to enter into),
directly or indirectly, any agreement with any Relevant Person (or, if such
third party is a Relevant Person, any other person) for the purpose of
acquiring, directly or indirectly, any securities or property of Altadis or any
member of the Altadis Group or to make a takeover bid for Altadis; and (C) the disclosure to any person by such third party or its Representatives of
the status of its discussions or negotiations with Altadis concerning a
possible Alternative Proposal or any of the material terms and conditions of
any such possible Alternative Proposal ((A), (B) and (C)
together being the Relevant Restrictions),
and it represents and warrants that it has not, and no member of the Altadis
Group has, amended, waived or released (or acquiesced in the breach of) any
Relevant Restriction in any Pre-existing Agreement (with any Relevant Person or
other third party);


 


(vi)      it will not, and
it will procure that no member of the Altadis Group will, (A) provide
Confidential Information to any Relevant Person or other third party with whom
it has not entered into a Pre-existing Agreement other than in circumstances
where Altadis has entered into a New Agreement with such Relevant Person or
other third party or (B) enter into any New Agreement (with any Relevant Person
or other third party) on terms which do not include all Relevant Restrictions,
nor amend, waive or release (or acquiesce in the breach of) any Relevant
Restriction in any Pre-existing Agreement (with any Relevant Person or other
third party) or any New Agreement (with any Relevant Person or other third
party); and


 


(vii)     in the event that
any party to a Pre-existing Agreement or a New Agreement, or its
Representatives or any person or entity controlled by it, directly or
indirectly, acquires shares of Altadis and such third party does not make the
best final tender offer for all the shares of Altadis, Altadis shall require such
third party to accept such best final offer in respect of all its Altadis
shares (and to procure that its Representatives or any person or entity
controlled by it shall accept such best final offer in respect of all their
Altadis shares).


 


3.             OTHER


 


(a)           Anti-trust – Imperial Tobacco confirms its belief in the
following statements in relation to anti-trust matters and confirms that
statements to the following effect will be set out in the Circular:


 


“The Proposed Acquisition requires mandatory merger notification to, and
clearance from, the EU Commission. It is expected that the EU Commission
clearance or conditional clearance is likely to be obtained before the Proposed
Acquisition is completed. The Enlarged Group may have to provide an undertaking
to remedy any potential competition concerns, including the possible divestment
of part of the business or material contracts of either Imperial Tobacco or
Altadis. However, your board is confident that any undertakings required would
not materially adversely affect the operational and financial performance of
the Enlarged Group.


 


The Proposed Acquisition also requires pre-clearance under the US
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Your board
expects that this clearance will be forthcoming.”


 


(b)           Governing law – This letter shall be governed by the laws of
Spain and the parties submit to the non-exclusive jurisdiction of the Courts of
the City of Madrid for all purposes in relation to this letter.


 

















 


(c)           Definitions – In
this letter:


 


business day means any day, other than a Saturday, a Sunday or a day on which banks
in Madrid or London are authorised or obligated by applicable law or regulation
to close; and


 


Alternative
Proposal means any proposal or offer to acquire (directly or
indirectly) by any means all or any of the issued share capital of Altadis or
any member of Altadis Group or for the whole or a material part of the
undertaking, business or assets of Altadis or any member of Altadis Group or
any proposal involving a merger, scheme of arrangement, reorganisation,
restructure or re-capitalisation of Altadis or any member of Altadis Group.


 


Yours faithfully


for and on behalf
of Imperial Tobacco Group PLC


 


 


 


	
   

  	
   

  
	
  Gareth Davis,
  Chief Executive

  



 


We agree to the
matters set out in this letter.


Signed for and on
behalf of Altadis, S.A.


 


 


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Jean-Dominique
  Comolli, Chairman of the Board

  	
  Antonio
  Vázquez, Group CEO

  	
  Date

  



 


 


ATTACHMENTS


Annexure 1 - Imperial
Tobacco’s Announcement


Annexure 2 – Altadis’s
Announcement


 
















 


IMPERIAL TOBACCO OVERSEAS HOLDINGS (3) LIMITED


 


RELEVANT FACT COMMUNICATION


 


Imperial
Tobacco Overseas Holdings (3) Limited (the
Offeror), a wholly-owned indirectly held subsidiary of Imperial
Tobacco Group PLC, in compliance with the provisions of article 82 of the
Spanish Stock Exchange Act (Ley 24/1988, de
29 de julio, del Mercado de Valores), hereby communicates to the
Spanish Stock Exchange Commission (CNMV) the
following


 


RELEVANT FACT


 


Today, 18 July 2007, the
Offeror has filed with the CNMV a takeover bid (the Offer) for 100% of the share capital of Altadis, S.A. (Altadis, the Company
or the Affected Company), that
will become effective upon its approval by the CNMV.


 


The Offer is addressed to
all the shareholders of Altadis and is extended to all the issued share capital
of Altadis, that is 252,436,856 ordinary shares of  €0.10 each, being 100% of the share capital of
Altadis. These ordinary shares are represented by book entries and are listed
on the Stock Exchanges of Madrid, Barcelona, Bilbao, Valencia and Paris, and
negotiated through the SIBE.


 


The consideration offered
amounts to 50 euros per Altadis share, that will be paid entirely in cash.


 


The payment of the total
consideration offered has been guaranteed by means of avales granted by Banco
Santander Central Hispano S.A., Barclays Bank PLC, Sucursal en España, Citibank
International plc, Lehman Brothers Bankhaus A.G., The Royal Bank of Scotland plc,
ABN AMRO Bank N.V. Sucursal en España and Morgan Stanley Bank International
Limited.


 


The Offer is conditional
upon:


 


	
  1.

  	
   

  	
  The acquisition of at
  least 201,949,484 shares of Altadis, representing 80 per cent, of Altadis’
  share capital;

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The general shareholders’
  meeting of Altadis resolving to amend Article 24 of Altadis’ bye-laws to
  remove the limitation on the number of votes that Altadis shareholders can
  cast at a general shareholders’ meeting before the end of the acceptance
  period, and Altadis registering the amendment to the bye-laws with the Madrid
  Mercantile Registry within said term; and

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  In order to comply with
  the regulatory requirements applicable to Imperial Tobacco Group PLC, the
  prior approval of the Offer by the general shareholders meeting of Imperial
  Tobacco Group PLC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The said general
  shareholders meeting of Imperial Tobacco Group PLC will take place on 13
  August 2007.

  



 


Altadis has confirmed to
Imperial Tobacco Group PLC that it considers that the Offer is attractive and
that, in the absence of a competing offer at a higher price being filed with
the CNMV, the board of Altadis will recommend the Offer to Altadis’
shareholders and the directors of Altadis intend to accept the Offer in respect
of their own beneficial shareholdings.


 


The Offeror is a member of
the group headed by Imperial Tobacco Group PLC.


 

















 


Attached to this Relevant
Fact as a Schedule is the UK Press Release that Imperial Tobacco Group PLC will
release in London immediately after the publication of this Relevant Fact.


 


For the relevant purposes,
it is communicated in Madrid on 18 July 2007


 


 


	
  /s/ Gareth Davis

  	
   

  	
  /s/ Robert Dyrbus

  	
   

  
	
  Mr. Gareth Davis

  	
  Mr. Robert Dyrbus

  



 

















 


NOTICE OF RELEVANT FACT


 


ALTADIS, S.A.


 


Madrid, July 18, 2007


 


l.- Imperial Tobacco Group
PLC (“Imperial Tobacco”) has sent
to the Board of Directors of Altadis, S.A.
(“Altadis”) a binding proposal for the making of a tender offer for
100% of the share capital of Altadis at a cash price of € 50 per Altadis share
(the  “Offer”).


 


If the Offer is successful,
Imperial Tobacco undertakes to (i) maintain a substantial presence in France
and Spain, inter alia with market, regional or divisional headquarters, (ii)
realize the integration without discrimination, in particular with respect to
employees and envisaged synergies, (iii) honour Altadis employees’ remuneration
entitlements, contractual arrangements and social plans on terms no less
favourable overall than currently in place in Altadis, and (iv) invite Altadis’
chairman and CEO, plus another Altadis non-executive board member to join as
directors of Imperial Tobacco; none of those persons has yet accepted such
invitation.


 


2.- The Board of Directors
of Altadis has assessed and analyzed together with its advisers the binding
proposal received from Imperial Tobacco.


 


The Board has noted that
this proposal should be viewed in the context of the consolidation of the world
cigarettes industry and of the two approaches received since March 14, 2007,
from Imperial Tobacco and CVC Capital Partners, at prices of, respectively, 47
and 50 € per share.


 


The Board has listened to
the assessment of its financial advisors, Credit Suisse, JPMorgan, Merrill
Lynch and Rothschild, and has concluded that the proposed price of €50 per
share, also taking into account the payment of a 0.60 € per share complementary
dividend by Altadis on the July 9, 2007, is fair.


 


3.- On the date hereof,
Imperial Tobacco, through a fully owned indirect subsidiary (Imperial Tobacco
Overseas Holdings (3) Limited) has presented to the National Securities Market
Commission (“CNMV”) a request for authorization of the Offer in the terms
indicated above.


 


The Offer is conditional
upon:


 


a)                                      acceptance thereof by at least 201,949,484
shares of Altadis, representing 80 per cent. of Altadis’ share capital;


 


b)                                     The general shareholders’ meeting of Altadis
resolving to amend Article 24 of Altadis’ bye-laws to remove the limitation on
the number of votes that Altadis shareholders can cast at a general
shareholders’ meeting before the end of the acceptance period, and Altadis
registering the amendment to the bye-laws with the Madrid Mercantile Registry
within said term; and


 


c)                                      the prior approval of the Offer by the
general shareholders meeting of Imperial Tobacco according to the UK Listing
Rules.


 

















 


4.- Altadis has confirmed to
Imperial Tobacco that it considers that the Offer is attractive and that, in
the absence of a competing offer at a higher price being filed with the CNMV, the
Board of Altadis will recommend the Offer to Altadis’ shareholders and the
directors of Altadis intend to accept the Offer in respect of their own
beneficial shareholdings.


 


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