Hat tip to the boys over at FT Alphaville for breaking the Reynolds American bid for Lorrilard story on Markets Live this morning.
I myself had been working on this story but FT Alphaville has (somewhat irritatingly) beaten me to the punch - and credit where credit is due.
I understand the thrust of their story is correct. Reynolds, in which FTSE 100-listed British American Tobacco has a 42pc stake, has been working with bankers from Lazard on its potential bid for Lorrilard.
Lorrilard, meanwhile, has retained boutique firm Centreview Partners as part of its advisory team, according to my sources.
I believe the two companies began talking last week, with Reynolds informally offering around $60 a share for Lorrilard, the maker of Newport cigarettes.
However, Lorrilard is understood to have rebuffed Reynolds's initial advances and is holding out for at least $62 a share.
A combination of Reynolds and Lorrilard should give the newly combined entity a valuation of around $50bn.
A spokesperson for Reynolds declined to comment while Lorrilard has not returned calls for comment.
UPDATE: FT.com has just published a story essentially confirming FT Alphaville's scoop and Betaville's follow up piece. Here is the link: http://www.ft.com/cms/s/0/bf6239d8-a2ee-11e3-ba21-00144feab7de.html#axzz2uvUHdcPm