Philip Morris International has no intention to drop its bid for Swedish Match, CEO Jacek Olczak told Reuters. In fact, he believes the $16 billion offer is “even more attractive” now given that the global macro-economic environment has changed since the original bid.
In May, PMI offered to buy the Stockholm-based company to help accelerate its move to cigarette alternatives. Swedish Match is best known for its oral tobacco products, including snus and the Zyn tobacco-free nicotine pouches that have taken the U.S. market by storm.
By Swedish law, 90 percent of Swedish Match shareholders need to approve the offer before Oct. 21, but some have come out against the $16 billion offer, saying it undervalues the company.
One of the holdouts, Elliot Management Corp., recently increased its stake in Swedish Match to 7.25 percent from 5.5 percent. The activist investor is believed to be planning to oppose the deal under its current terms. Elliott’s increased stake means the offer will fail if another 2.75 percent of shareholders take a similar view.
Shareholder Framtiden Partnerships, which owns 1 percent of Swedish Match also believes PMI’s offer is too low.
Olczak indicated that if fewer than 90 percent of Swedish Match shareholders approve the bid, PMI could simply become a majority shareholder. He said he regularly met with investors of both companies but declined to comment on whether PMI would increase its offer.
The acceptance period for the offer was initially set to expire on Sept. 30, 2022, but was later extended to Oct. 21, 2022, as the bid awaits approval from the European Commission.