Dividends and Investor backs Philip Morris’s $16 billion offer for Swedish Match

Today is Black Friday and around the shopping malls and retail stores, people are searching for values for their holiday shopping. In the corporate world, company’s strategic planning team does what individuals due.

One company that was searching for an undervalued company is Phillip Morris International (PMI) one of the largest makers of cigarettes. PMI found a company in Sweden called Swedish Match which controls half the world’s market for snus – a moist, smokefree snuff.

In an article by Reuters, PMI bid $9.73 a share which was a premium to where the shares were trading. Companies including Elliot Management Corp believed the offering should be higher. In this case, Elliot Management bought more shares and in October reached 10% holding.

PMI raised the bid to $10.58 a share because although they own 80% of the shares, they needed 90% to reach the threshold for forced redemption of the remaining minority shareholding. Once the price was raised Elliot agreed to tend and PMI will own Swedish Match. You can expect to see Snus in the tobacco section soon.

Linking to dividend paying stocks, all companies look for undervalued competitors or add on their companies or similar to individual shoppers they are looking for value. The difference is the number of 0s at the end of the cheque. In every market there is value or opportunity, if you similar to a corporation you take your time to find it and buy it at the right price for the future.

There are more questions than answers, till the next time – to raising questions.


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