American Brands Stock Up on Rumors of Bid

Unilever N.V., the Anglo-Dutch consumer products company that owns Lever Brothers, is rumored to be contemplating a $90-a-share bid for American Brands Inc., stock speculators said today.

Shares in American Brands, a tobacco and office products company, soared $9.75 to $67.375 by 1:30 p.m. EST, just slightly off its earlier highs. The stock was the most actively traded on the New York Stock Exchange.

A spokesman for Unilever in the United States, David Lustig, said the company could not comment as a matter of policy.

A $90-a-share offer would value American Brands at $8.4 billion, making it the fifth-largest corporate acquisition in the United States.

A takeover of American Brands, which had sales of $9.2 billion last year, also would restore Unilever as the world’s largest consumer products firm, with $39 billion in revenue.

Unilever recently lost the title when Philip Morris Cos. acquired Kraft Inc., creating a giant with $37 billion in annual sales.

American Brands spokesman Dan Conforti said, “It is company policy not to comment on stock market activity or rumors.” The firm was contacted by the NYSE, which asked it to issue a statement explaining the movement in its stock.

Traders said the takeover rumors started in Switzerland on Thursday, and gave American Brands’ stock a boost in late trading. The stock closed up $2 at $58 Thursday.

This is not the first time Unilever has been rumored to be eyeing American Brands. The European company was said to have considered bidding for American Brands in 1986 before it settled on Chesebrough-Pond’s Inc., which makes cold creams and hand lotions.

In the intervening years, American Brands has repeatedly surfaced as a rumored takeover target. In January of this year, it turned on a potential suitor, E-II Holdings Inc., a combination of former Beatrice Cos. units, and bought it for $1.14 billion. A few months later, it sold most of the pieces, including several food lines.