Reinet Investments SCA has agreed to sell its 2% stake in British American Tobacco (BAT) for £1.22 billion ($1.49 billion), marking the exit of the Luxembourg-based investment firm from a long-standing position in the tobacco giant. The sale, which involves approximately 43.3 million shares of the London-listed company, was priced at £28.20 per share, a 3.9% discount to BAT’s previous closing price.
The news led to a sharp decline in BAT’s stock, which fell by as much as 2.9% on January 14, the steepest intraday drop since October. Despite the market reaction, analysts, including Bloomberg Intelligence’s Duncan Fox, have stated that Reinet’s divestment should not impact BAT’s commitment to its £900 million share buyback program planned for 2025. Fox noted that investor demand for the shares was strong, surpassing the amount being offered soon after the deal’s launch.
Reinet, which was established in 2008 following the spin-off from Swiss luxury group Richemont, has seen its BAT stake account for about a quarter of its net asset value, according to a report from last year. The company intends to utilize the proceeds from the sale for its continued investment activities.
BAT, known for products such as Lucky Strike cigarettes, Vuse vapes, and Velo nicotine pouches, has increasingly focused on expanding its portfolio of smoke-free products in response to declining cigarette consumption. In 2024, the company took a significant writedown on its U.S. cigarette brands, reflecting the ongoing shift of smokers toward alternatives like vapes, nicotine pouches, and heated tobacco sticks.
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