Souza Cruz SA soared the most in seven years after British American Tobacco Plc, the maker of the Lucky Strike and Pall Mall brands, raised its bid for Brazil’s biggest cigarette maker.
Souza Cruz jumped as much as 14 percent to 26.63 reais in Sao Paulo trading Thursday after BAT increased the offer for the stake it doesn’t already own to 27.62 per share. The rally was the biggest on Brazil’s benchmark stock index, which fell 0.7 percent as of noon local time.
BAT said in a statement that Aberdeen Asset Management, Souza Cruz’s second-largest shareholder, with a stake of about 4.5 percent, agreed to sell its shares at the higher price. The London-based company said it expects to be able to launch the tender offer in September. BAT is looking to squeeze more profit out of Brazil, its biggest market, as the volume of cigarettes sold globally falls because of increased government restrictions and the spread of e-cigarettes.
“It’s now a lot more likely that the tender will go through, with Aberdeen committed to accepting the offer,” Luis Gustavo Pereira, an analyst at brokerage firm Guide Investimentos, said from Sao Paulo.