Elliott Management Started Buying Swedish Match Stock After Philip Morris $16B Bid - What's Next

  • Philip Morris International Inc PM may have to increase its Swedish Match AB's SWMAY $16 billion bid to gain full ownership of the smokeless-tobacco maker, writes Wall Street Journal.
  • Philip Morris wants to gain an edge over its competitors, including Altria Group Inc MO and British American Tobacco PLC BTI, to dominate smoke-free tobacco products. 
  • According to the WSJ report, since the companies announced their deal in May, hedge fund Elliott Management Corp has acquired an undisclosed stake in Swedish Match.
  • "It's crystal clear that Elliott is trying to get a better price from Philip Morris," said Massimo Stabilini, a hedge-fund manager at London-based Sinclair Capital. Mr. Stabilini said he started buying Swedish Match's shares after the deal's announcement, taking advantage of the stock initially trading below the offer price.
  • Triton had to increase its bid for Clinigen Group PLC by almost 5% in another takeover. Elliott, which had owned Clinigen stock for months, had built up a stake of 14% by the time Triton raised its offer.
  • Philip Morris's offer expires in October and is conditional on gaining more than 90% of Swedish Match's Stockholm-listed shares.
  • Elliott would need to buy around $1.6 billion of Swedish Match stock to stop Philip Morris from reaching 90%.
  • Price Action: PM shares are down 0.54% at $101.72 during the premarket session on the last check Thursday.
  • Photo via Company
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