British Clear BAT Industries Takeover Bid

The British government today cleared Hoylake Investment Ltd.’s $21-billion bid for the British conglomerate BAT Industries PLC.

The decision follows last week’s ruling by the Panel on Takeovers and Mergers allowing Hoylake to suspend its all-paper bid until it resolves regulatory problems with state insurance commissioners in the United States.

Today’s approval came in the form of a decision by Trade Secretary Nicholas Ridley not to refer the bid to the Monopolies and Mergers Commission.

However, the notice from Ridley said the matter could be reconsidered if there is a “material change” in the terms of the bid or other “material facts.”

Shares Up

BAT shares were up the equivalent of 11 cents at $12.96 on the London Stock Exchange this morning.

Hoylake, an investors group led by the Anglo-French financier Sir James Goldsmith, offered $13.87 worth of securities for each BAT share.

BAT said it regretted Ridley’s decision.

The British conglomerate, with holdings in tobacco, paper, retailing and financial services, said a referral to the Monopolies Commission “would’ve provided an opportunity for the government to establish a coherent policy on the controversial question of highly leveraged bids for major companies using junk bonds, with their negative potential for the markets, for companies and for small shareholders.”

BAT Chairman Patrick Sheehy said warding off Hoylake remained the company’s first priority.

“We are continuing our strategic review in light of the historic undervaluation of our shares,” he noted, adding that the company is determined to “take suitable measures to provide a sustainable long-term increase” in shareholder value.