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WINSTON-SALEM, N.C. --
Rothmans Inc. of Canada increased its offer yesterday to buy privately held Santa Fe Natural Tobacco Co. to $353.7million, topping a $320 million bid by R.J. Reynolds Tobacco Holdings Inc.
Santa Fe's board of directors is considering the deal, according to the Winston-Salem Journal. Paul Jewer, the chief financial officer at Rothmans, said he doesn't anticipate hearing anything from Santa Fe's board until next week regarding his company's new offer.
A takeover by either Rothmans R.J. Reynolds requires Santa Fe approval and the go-ahead from regulators. Currently, Santa Fe's board has the new Rothmans offer and the RJR bid of $320 million in cash from last week in front of them to consider, the report said.
If Santa Fe's board determines that the new Rothmans bid is superior, "we'll evaluate our options," said Maura Payne, an RJR spokeswoman.
The takeover tale of Santa Fe, which makes additive-free American Spirit cigarettes, began in September, when Rothmans offered to buy Santa Fe for $275 million in cash, stock and bonds. The new offer from Rothmans was a big bump. "We think it's a great acquisition," Jewer said. "It's a good fit for Rothmans."
Before the new Rothmans offer was announced, Santa Fe's board told Rothmans that it would recommend to its shareholders to accept the RJR bid if Rothmans didn't come up with a better offer.
Rothmans holds a 60 percent ownership stake in Benson & Hedges Inc.; the other 40 percent is owned by a Swiss affiliate of Philip Morris Inc., the top cigarette maker in the United States.
Santa Fe has proved to be an attractive takeover candidate because it has rapidly increased sales of its American Spirit premium-brand cigarettes. Generally, American Spirit cigarettes are more expensive than other cigarette companies' premium brands, analysts said.