No comment from BAT on ETI bid

British American Tobacco PLC declined to comment on reports it has held talks with Swedish Match AB about bidding jointly for Ente Tabacchi Italiano, the state-owned tobacco group being sold under the Italian government's £12.5bn privatisation programme.

"British American Tobacco said in September that we were throwing our hat into the ring and would join the short-list. Since then, all the parties involved have been asked to sign a confidentiality agreement so we cannot comment on the process," a spokesman said.

Sunday newspaper The Business reported the two companies had agreed a proposal where they would split ETI's cigarette manufacturing and retail businesses should they emerge as the preferred bidder.

BAT would acquire EIT's cigarette production, while Swedish Match, owner of the Bryant & May and Swan Vesta brands, would take on the retail and distribution business, the paper reported.