Imperial Tobacco Gains on Speculation BAT Raising Money for Bid
Imperial Tobacco Group Plc rose to a record in London on speculation that British American Tobacco Plc is arranging financing to make a bid for the the maker of Davidoff and Lambert & Butler cigarettes.
The stock rose as much as 3.7 percent to 3,620 pence in London, the biggest gain in the U.K. FTSE 100 Index. While BAT is said to be raising funds, it hasn’t made an approach and it’s possible none will be made, the Financial Times’s Alphaville blog said Friday, citing people close to the matter it didn’t name. The blog said its report is based on “market chatter” and hasn’t been formally tested through “traditional journalistic channels.”
BAT may back off from a bid given recent gains in Imperial Tobacco’s share price, which now may be too high, the FT said, citing the people. The stock has risen 26 percent this year. Imperial and BAT representatives didn’t immediately return messages seeking comment.
A takeover of Imperial Tobacco would end almost two decades of independence for the cigarette maker, which was spun off by Hanson Plc in 1996 before embarking on a 17 billion-pound ($26 billion) acquisition spree that transformed it into one of the world’s four main tobacco companies. The company contributed further to the industry’s consolidation last year, spending $7.1 billion on brands such as Kool and Blu e-cigarettes.
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