Tag: Framtiden Management Co.

  • Framtiden Tenders its Swedish Match Shares

    Framtiden Tenders its Swedish Match Shares

    Photo: Swedish Match

    Framtiden Management Co. has tendered its Swedish Match shares to Philip Morris International despite reservations about the takeover.

    “As a Swedish Match shareholder since 2003, I believe that this deal does not make sense for long-term shareholders,” said the Framtiden Partnerships managing member Dan Juran in a statement. “Through a press release and white paper, my partner Chris Anderson and I shared our view in the hope other shareholders would see the merits of our position. Philip Morris has since acquired nearly 86 percent of shares.

    “Failing our preferred outcome, an independent public company, our intention was to continue on the Swedish Match journey as a minority shareholder of a majority-owned public company. Unfortunately, during the current offer ending Nov. 25, or soon thereafter, we believe the odds are high Philip Morris will attain the 90 percent threshold necessary to delist the shares and commence a compulsory offer. Given a likely choice between tendering now or owning private shares for a short period before a compulsory offer, we have regretfully tendered our shares.”

    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. and Framtiden, 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.

    Elliot Management Corp. then accepted the sweetened bid, contributing to PMI’s 86 percent shareholding.

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

    The Framtiden Partnerships owned over 14.5 million Swedish Match shares, representing about 1 percent of outstanding shares.

  • PMI Won’t Drop Swedish Match Bid: Olczak

    PMI Won’t Drop Swedish Match Bid: Olczak

    Jacek Olczak (Photo: PMI)

    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.

  • Framtiden Opposes PMI Bid for Swedish Match

    Framtiden Opposes PMI Bid for Swedish Match

    Photo: Swedish Match

    Framtiden Management Co. announced its opposition to the proposed takeover of Swedish Match by Philip Morris International. The Framtiden Partnerships own over 14.5 million shares representing about 1 percent of outstanding shares.

    As a long-term Swedish Match shareholder since 2003, Framtiden believes that the acquisition offer of SEK106 per share deeply undervalues the company, which Framtiden estimates to be worth nearly SEK200 per share.

    The company detailed its position in a white paper.

    According to Framtiden, the offer inadequately values Swedish Match’s leading position in the rapidly growing nicotine pouch segment and the latent market potential worldwide. Furthermore, the investors believe the offer underappreciates the uniqueness of a fast-growing established global consumer staples business and forces the realization of capital gains that would otherwise be deferred for long-term investors who want to participate in the company’s continued growth.

    “My partner Chris Anderson and I believe that this deal does not make sense for long-term shareholders,” said Dan Juran, managing member of the Framtiden Partnerships, in a statement. “I have closely followed Swedish Match’s development for nearly two decades, built relationships with its managers and currently serve as the chairman of the company’s nominating committee. I was dismayed to see the board recommend the sale of this Swedish jewel at a bargain price in the early stage of probably the greatest chapter in its long history.

    Juran said that while investors may be tempted by the short-term premium, especially during a period of market declines, he compared the potential of Swedish Match to that of Coca-Cola in the 1980s and Philip Morris in the 1950s.

    “Those companies compounded earnings at a superior rate for many years, and shareholders who stuck with them were rewarded mightily,” he said. “We believe sticking with Swedish Match is likely to prove far more remunerative to shareholders over time than cashing out. We hope other shareholders see the merits of our position, further detailed in our white paper.”

    Framtiden Management Co. joins Elliott Management Corp. and Bronte Capital in asserting that PMI’s offer undervalues Swedish Match. Elliott Management Corp. is believed to be increasing its stake in Swedish Match in order to get a better price from PMI.

    PMI says it has already obtained approvals for its acquisition by regulators in Brazil and the United States. European regulators have indicated that they intend to review the bid by Oct. 11.