British American Tobacco could puff up cash offer for Reynolds American
British American Tobacco (BAT) is preparing to puff up its takeover bid for US rival Reynolds, according to reports.
The FTSE 100 cigarette company announced a $56.50-per-share bid for the 58 per cent of Reynolds American it does not already own in October. This bid valued Reynolds at around $47bn.
Taking full control of Reynolds would open a valuable door in the US market for BAT.
Read more: Shares in BAT have jumped after it made a $47bn offer for Reynolds
Some 43 per cent of the offer, or $24.13 per share, was in cash, with the remainder in BAT shares.
Negotiations have centred on altering the cash-share balance, the Sunday Times reported, and BAT has indicated it is willing to add more cash to the deal.
It was reported that this alteration could add a small amount to the overall price as well as reducing the stock offer.
BAT’s share price has tumbled six per cent to £45.09 since it announced the takeover approach, while Reynolds’ is up 20 per cent to $55.54.
Read more: British American Tobacco hopes for lucky strike with $47bn Reynolds offer
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It was reported that BAT could offer an additional $8 per share to the offer and could be announced as soon as this week.
BAT declined to comment.
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