Reynolds reportedly rejects takeover offer

Reynolds has reportedly rejected a takeover offer from British American Tobacco Photo: : Jason Alden/Newscast/PA Wire

US tobacco firm Reynolds has reportedly rejected a 47 billion US dollar (Â£38.3 billion) takeover offer by British American Tobacco (BAT) that would have created the world's largest listed tobacco company.

BAT, which currently owns 42.2% of Reynolds, had offered to buy the remaining 57.8% of the company last month.

However, the merger had yet to be approved by Reynolds’ board of directors.

Reuters and Bloomberg are now reporting that the offer has been rejected.

Sources told Bloomberg that the two tobacco companies are still in negotiations and BAT is willing to increase its bid.

A spokesman for BAT declined to comment.

The deal was set to bring a raft of global brands under one roof, including BAT products like Dunhill, Lucky Strike, Rothmans, Kool, and Kent, and Reynolds’ brands like Newport, Camel, Pall Mall, Doral, Misty, and Capri slims.

BAT’s £38.3 billion offer valued the remaining 57.8% stake at 56.50 US dollars (£46) per share, representing a 20% premium against the closing price of Reynolds’ shares on October 20.