Imperial Tobacco will today seek shareholder approval for its £11 billion takeover of Altadis, the Franco-Spanish cigarettes group, which includes a £5 billion rights issue.

The British tobacco group is hoping to get the go-ahead for the €50-a-share all-cash deal at an extraordinary general meeting this afternoon.

Imperial is attempting to secure backing for the rights issue at a time of market instability, after last week’s panic share selling around the world and with selling expected to continue this week.

The UK group has given itself a 12-month window in which to execute the rights issue. In the meantime, it has secured a £5.4 billion temporary loan, to be repaid through the £5 billion share issue, which has been underwritten, or guaranteed, by a number of banks, including ABN Amro, Hoare Govett, Morgan Stanley, Citigroup and Lehman Brothers.

Imperial has also raised £9.6 billion in funding that will be used for the acquisition as well as for paying down some of the debt in Altadis.

If shareholders approve the deal today, it will spell the end of a long-running saga in which Imperial was forced to keep raising its bid for Altadis from an original €45-a-share offer in March. The company also had to fight off a competing bid from CVC Capital Partners and PAI Partners, the private equity firms.

A majority vote in favour of the acquisition of Altadis will help to close the gap between Imperial and its rival JTI-Gallaher after Japan Tobacco’s £7.5 billion takeover of Gallaher of the UK. Both remain behind Altria, the world’s largest cigarette maker, and Britain’s BAT. The acquisition of Altadis will significantly boost Imperial’s overseas revenues.

Events dragging out

Mar 15: Gareth Davis, chief executive of Imperial Tobacco, right, makes a €45-a-share all-cash offer for Altadis, valuing it at £7.6 billion

Mar 16: Altadis’s board rejects the bid, saying it fails to reflect the “strategic value” of the business

Apr 10: Imperial Tobacco admits it has made a revised €47 per share offer for Altadis that has been rejected

May 4: CVC Capital Partners and PAI Partners offer €50 a share

May 8: Altadis lets CVC and PAI to conduct due diligence on it

Jul 18: Imperial increases bid to €50 a share. The board at Altadis recommends the bid. CVC and PAI fall away after struggling to finance their deal

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