Elliott Management Corp. Increases Stake in Swedish Match

Nov.01.2022
Elliott Management Corp. Increases Stake in Swedish Match
Elliott Management increases stake in Swedish Match prior to deadline on decision to accept Philip Morris' acquisition offer.

On October 28th, well-known investment firm Elliott Management Corp. announced its decision to increase its stake in Sweden's Match Group to over 10%. This move came just a week before the November 4th deadline for shareholders to decide whether or not to accept Philip Morris International's (PMI) acquisition offer for the Swedish company.


In May of this year, PMI offered approximately $16 billion to acquire Swedish Match. The board of directors at Swedish Match recommended that shareholders accept the offer, but some investors, including Elliott Management Corp., opposed it, stating that the offer undervalued their company.


Earlier this month, PMI increased its offer from SEK 106 per share in May to SEK 116 per share ($10.34). The board of Swedish Match recommended that shareholders accept PMI's revised offer.


According to Swedish law, PMI requires approval from 90% of its shareholders to gain full control of the company. Elliot has increased its ownership stake from 7.25% to 10.5%, meaning that if they refuse the proposal, the transaction will not be able to go through. PMI has stated that they will not increase the revised offer price any further when announcing the increased bid.


PMI has the option to lower acceptance thresholds and gain a majority stake to prevent a failed acquisition. Prior to Elliott disclosing higher ownership, CEO of Swedish Match, Lars Dahlgren, told Reuters that he believes the company can develop independently or in partnership with Philip Morris.


I believe that as an independent company, we have exciting prospects, but I see exciting opportunities for potential mergers," he said.


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