Elliott Management Started Buying Swedish Match Stock After Philip Morris $16B Bid - What's Next

Philip Morris International Inc PM may have to increase its Swedish Match AB's SWMAY $16 billion bid to gain full ownership of the smokeless-tobacco maker, writes Wall Street Journal.
Philip Morris wants to gain an edge over its competitors, including Altria Group Inc MO and British American Tobacco PLC BTI, to dominate smoke-free tobacco products.
According to the WSJ report, since the companies announced their deal in May, hedge fund Elliott Management Corp has acquired an undisclosed stake in Swedish Match.
"It's crystal clear that Elliott is trying to get a better price from Philip Morris," said Massimo Stabilini, a hedge-fund manager at London-based Sinclair Capital. Mr. Stabilini said he started buying Swedish Match's shares after the deal's announcement, taking advantage of the stock initially trading below the offer price.
Triton had to increase its bid for Clinigen Group PLC by almost 5% in another takeover. Elliott, which had owned Clinigen stock for months, had built up a stake of 14% by the time Triton raised its offer.
Philip Morris's offer expires in October and is conditional on gaining more than 90% of Swedish Match's Stockholm-listed shares.
Elliott would need to buy around $1.6 billion of Swedish Match stock to stop Philip Morris from reaching 90%.
Price Action: PM shares are down 0.54% at $101.72 during the premarket session on the last check Thursday.
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