BAT share price: Company reduces offer to minority Souza Cruz shareholders

British American Tobacco Plc (LON:BATS) has lowered its proposed offer for the 24.7-percent stake it does not already own in Brazil’s largest tobacco company Souza Cruz SA.Souza Cruz said today in a security filing that the UK tobacco giant was now offering 26.14 reals in cash for each of its shares, down from the initial offer of 26.75 reals. The new offer reflects the subtraction of a 0.61 real dividend payout approved by Souza Cruz shareholders yesterday. Reuters reported on the development.

The newswire said that the process was currently suspended, pending a request by minority shareholders for a new independent appraisal of Souza Cruz in an extraordinary meeting. An appraisal earlier this month estimated the fair economic value for Souza Cruz shares at between 22.09 reals and 24.54 reals.
Assuming that the buyout is successfully completed, BAT plans to delist Souza Cruz from the São Paulo Stock Exchange. A number of foreign firms have recently adopted this approach of delisting their Brazilian subsidiaries.
BAT considered delisting Souza Cruz nearly five years ago, but the plan was scrapped due to the strength of the real at the time. The situation has now changed following the rally of the British pound in the past year. This gives BAT the opportunity to “buy the asset at a very compelling price”, according to Martin Deboo, an analyst at American investment bank Jefferies, who earlier this month described BAT’s initial bid as “a bit of sensible opportunism”.
In today’s trading, BAT shares were down 0.2 percent at 3,662.50p, as of 15:13 UTC. The stock has gained 4.6 percent since the start of the year. The company’s market capitalisation currently stands at £68.4 billion.
As of 16:05 GMT, Friday, 20 March, British American Tobacco plc share price is 3,660.75p.