Shares of select U.S. tobacco stocks rose on Monday fueled by an article in The Times (of London) which reported that the UK’s biggest tobacco group, British American Tobacco (BATS), has hired Deutsche Bank and UBS to look for possible multibillion acquisition opportunities in the US.
Citing unnamed “City sources,” the article added that possible deals could include a takeover of Reynolds American (RAI) or a stake in Lorillard Tobacco (LO).
RAI is up 2.3% in late-morning U.S. trading, while LO is up some 1.2%. BATS shares rose 1.3% on the London Stock Exchange in afternoon trading.
In contrast to other stocks in the tobacco sector, shares of Philip Morris International (PM), the largest US cigarette maker, fell 0.3% to $86.11.
Deal speculation lifted related shares. Leaf tobacco supplier Alliance One International (AOI) rose 2.8% to $2.59 in New York today. Universal Corporation (UVV), which operates as a leaf tobacco seller, rose 1% to $55.87.
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