PMI considers lowering Swedish Match acceptance threshold

Philip Morris International Inc. (PMI) is considering lowering the acceptance threshold on its USD 16 billion takeover bid for smokeless tobacco company Swedish Match, reports Bloomberg.

The Marlboro maker is evaluating the potential move to increase the likelihood the acquisition will go through despite opposition from shareholders such as Elliott Investment Management, people with knowledge of the matter said. PMI will likely decide in the next few weeks whether to make any changes to the deal conditions, the people said.
Originally, the bid by Philip Morris was conditioned on acquiring more than a 90 per cent stake in Swedish Match, a level that would normally allow it to oust any remaining dissenters and take the company private, the report said. The idea of lowering the acceptance threshold raises the prospect that PMI could end up with a majority stake in Swedish Match and keep it publicly traded, at least temporarily.
PMI is in close contact with Swedish Match and remains committed to completing the transaction, the people said. The company hasn’t made a final decision on possible changes and may have to increase its bid if it continues to face investor opposition, the people said.

In August, PMI extended the acceptance period for the offer to 21 Oct, after European regulators indicated they needed more time to review the deal. According to a Reuters report, European Union antitrust regulators have set 11 Oct as the new deadline.

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