By Marie Mannes
(Reuters) -Activist investor Elliott Management Corp has raised its stake in Swedish Match to over 10%, it said in a filing on Friday, increasing its clout over Philip Morris International’s (PMI) $16 billion takeover bid for the Swedish company.
The move comes a week before the Nov. 4 deadline when shareholders must decide whether to approve the $16 billion offer for the company, which controls about half the world’s market for snus, a Scandinavian moist oral tobacco product, and is also the global industry leader for nicotine pouches.
Under Swedish law, PMI needs 90% of shareholders to agree to the deal, aimed at getting a slice of the fast-growing smoke-free market, in order to get full control over the company.
Philip Morris has been under pressure to increase the offer as hedge funds, including Elliott, have bolstered their stakes in Swedish Match in anticipation of a sweetened bid.
After increasing its stake to 10.5% on Friday from 7.25% previously, Elliott could scupper the deal if it rejects the offer.
Shares were little changed in midmorning trade, albeit outperforming a weak broader market.
The activist investor has been building its stake in recent months, doubling it from 5.1% in September.
Bloomberg reported in July, citing sources, that Elliott was planning to oppose the deal. That was before PMI sweetened the terms last week. Elliott has not commented on its intentions.
The deal has also faced opposition from other shareholders.
Elliott and Swedish Match declined to comment on Friday, while PMI did not immediately respond to requests for comment.
(Reporting by Marie Mannes; Editing by Josephine Mason and Louise Heavens)
