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U.K. tobacco shrugs off suit
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July 8, 1999: 8:49 a.m. ET
Robust European stocks reflect lack of concern over lawsuit
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LONDON (CNNfn) - European investors Thursday took a sanguine view of the latest court tribulations for tobacco companies.
Despite a landmark court ruling in Florida Wednesday that could lead to damage payments of up to $200 billion, European tobacco stocks suffered little damage when trading began Thursday.
British American Tobacco (BATS), whose Brown & Williamson U.S. unit owns such brands as Kool, Kent, Lucky Strike and Benson & Hedges, slid 3 percent to 553 pence in London. Analysts had predicted a much bigger decline.
Fellow U.K. tobacco producers Gallaher (GLH) and Imperial Tobacco (IMT) fared better, with Gallaher inching ahead to 383 pence, and Imperial almost unchanged at 687 pence. In Paris, Seita (PITA), which makes Gauloises and Gitanes cigarettes, rose almost 1 percent to 59.10 euros.
London analysts played down the impact of the court decision.
"This decision was not unexpected, and there are no financial implications [at this stage]" said tobacco analyst Paul Deacon of Goldman Sachs.
He said that as the suit moves to its second phase the financial picture will become clearer, "and the industry is on relatively safe ground."
BAT is the only one of the U.K.-listed tobacco groups to have operations in the United States, and Deacon said the spillover effect for the likes of Gallaher and Imperial is small. 
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