Acceptance Period for Swedish Match Offer Expires Today

Shareholders of Swedish Match must decide today whether to tender their shares to Philip Morris International.

In May, PMI bid about $16 billion for Swedish Match. Swedish Match’s board of directors recommended shareholders accept the offer, but some investors, including Elliott Management Corp., objected, saying the bid undervalues their firm.

In October, PMI increased the price of its bid to SEK116 per share from the SEK106 per share offered in May. Swedish Match’s board of directors advised shareholders to accept PMI’s revised offer.

Under Swedish law, PMI needs 90 percent of shareholders to agree to the deal in order to get full control over the company.

Earlier this week, Framtiden Partnerships said it would not accept PMI’s sweetened offer, according to Reuters.

The investor, which owns nearly 1 percent of the Swedish nicotine products manufacturer, believes Swedish Match is better off as an independent company. Framtiden managing member Dan Juran estimates Swedish Match to be worth close to SEK200 per share.

Framtiden said it would urge Swedish Match management to initiate a share buyback and potentially a special dividend if the deal does not go through.

“As we wrote in our white paper, there is incredible long-term value in this asset, but we also think that there is great value to be realized in the short term as well,” Chris Anderson, a partner in Framtiden, was quoted as saying by Reuters, adding that a planned U.S. cigar business spinoff will also provide additional shareholder value.

On Oct. 28, Elliott Management Corp. raised its stake in Swedish Match to over 10 percent—enough to scupper the deal if it opposed the bid.