U.S. cigarette-maker Reynolds American Inc is reportedly seeking a higher price from British American Tobacco Plc after rejecting its $47 billion takeover offer. David Pollard reports.
Risky they may be but cigarettes are still big business. Even in the highly-regulated US market. New reports of Reynolds' rejecting BAT's 47 billion dollar takeover offer - and demanding more - could then be something of a setback for BAT. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "It's not a massive surprise that they've rejected the offer and it certainly doesn't mean the end of the deal. I think they're looking to create the largest cigarette brand effectively in the world." There are some big brand names at stake. Reynolds - maker of Newport and the iconic Camel - controls over a third of American sales. Buying it would make Britain's BAT the only tobacco firm with a major footprint both there and in international markets. A prospect regulators may not be that fired up about. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING "The regulatory issues is potentially the biggest thing that's going to stand in the way of this deal being completed. I don't think it's going to be a case of prices. I think this is something they may come to an agreement on. But the important thing is that it's going to be a very, very long process. I don't see anything significant happening anytime soon." Reynolds shares are up 15 per cent this year. Analysts betting BAT will offer more. Their hopes of a deal still very much alive.