Elliot Management has increased its stake in Swedish Match to over 10 per cent putting the activist hedge fund in a position to potentially block Philip Morris International’s bid to acquire the smokeless tobacco firm, according to a report by Bloomberg.
Elliot Management has increased its stake in Swedish Match to over 10% putting the activity hedge fund in a position to potentially block Philip Morris International’s (PMI) bid to acquire the smokeless tobacco firm, according to a report by Bloomberg.
PMI needs the backing of 90% of Swedish Match for the deal to progress but has so far refused to sweeten its proposal after tabling a ‘best and final’ $16 billion offer last week. Elliot now holds 10.5% of the company’s stock having upped its holding from 7.5%.
According to a regulatory filing, another hedge fund, Davidson Kempner, has also increased its stake in Swedish Match to 5%.
PMI chief executive Jacek Olczak said on Friday that achieving 90%-plus backing was “critical” to the progression of the deal, which has been recommended to shareholders by The board of Swedish Match. PMI though, is sticking to its existing offer and may walk away from the if it fails to win the required 90%. Under Swedish law PMI also has the right to lower the threshold after 4 November, but that would limit its ability to fully control and integrate Swedish Match with its existing business.
