Framtiden Management Co. has announced its opposition to the proposed acquisition of Swedish Match by Philip Morris International. Framtiden Partnerships owns over 14.5 million shares, representing approximately 1% of the outstanding shares.
As a long-term shareholder of Swedish Match since 2003, Framtiden believes that the takeover offer of 106 Swedish Kronor per share significantly undervalues the company's worth. Framtiden estimates that the company is worth approximately 200 Swedish Kronor per share.
According to Framtiden, the offer did not adequately recognize Sweden's Match's leading position in the rapidly-growing nicotine pouch market and its global potential. Additionally, investors feel that the offer undervalues the uniqueness of Match's rapidly-growing, mature global consumer essential business and forces long-term investors who wish to participate in the company's continued growth to realize capital gains, otherwise these gains will be deferred.
In a statement, Dan Zhuran, a managing member of Framtiden Partnerships, said, "My partner, Chris Anderson, and I believe this deal is not in the interest of long-term shareholders. Over the past twenty years, I have closely followed the development of Swedish Match, established relationships with its managers, and currently serve as chairman of the company's nomination committee. I am disappointed to see the board recommend selling this Swedish gem at a low price during what could be its greatest chapter in history.
Zhulan stated that although investors may be tempted by short-term premiums, especially during market downturns, he compared the potential of Swedish Match to that of Coca-Cola in the 1980s and Philip Morris in the 1950s.
These companies have seen a compound growth rate over the years, resulting in lucrative returns for shareholders who have stayed the course," he said. "We believe that holding onto investments in Swedish Match over time could yield greater returns for shareholders than cashing out. We hope that other shareholders will see the advantages of our position, as further detailed in our white paper.
Framtiden Management Co., along with Elliott Management Corp. and Bronte Capital, have claimed that PMI's offer undervalues Swedish Match. It is believed that Elliott Management Corp. will increase its stake in Swedish Match in order to secure a better price from PMI.
PMI announced that its acquisition deal has received approval from regulatory agencies in Brazil and the United States. European regulatory agencies have stated that they intend to review the bid before October 11.
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