Reynolds American Ticks Higher After British American Tobacco Acquires Outstanding Shares

Reynolds American, Inc. RAI shares are trading higher by $1.90 at $57.87 In Tuesday's session.

The catalyst for the rally is the announcement that British American Tobacco BTI will acquire the Reynolds American stock it doesn't already own for $29.44 per share in cash and 0.526 of British American Tobacco shares. That price comes in at a modest premium to the previously announced price of $56.50.

So far, risk-arbs are showing a bit of reluctance to take the issue to the stated take-out price, as the current high or the session stands at $58.15. However, the discrepancy in price may bet attributed to the price decline in shares of British American Tobacco, which are trading lower by $1.52 at $113.69 in today's session.