 Cigarettes are losing their allure to many health-conscious Europeans |
Shares in Gallaher, the maker of Silk Cut and Benson & Hedges cigarettes, have risen by 20% in London after it was approached by a potential buyer. In early trading, the firm was the biggest gainer on the FTSE-100 index.
Gallaher declined to name the suitor, saying the approach was preliminary and there was no guarantee of a firm bid.
But shares in Japan Tobacco went up nearly 5% in Tokyo after Reuters news agency quoted sources identifying it as the most likely firm behind the move.
Gallaher's share price climbed to �11.75 by 0815 GMT, valuing the company at �7.7bn.
 |  There can be no assurance that any offer will be made |
Tobacco companies are facing a squeeze in many European markets because consumers are turning away from smoking as governments and the European Union look to improve people's health.
Gallaher, like many of its rivals, has been looking to emerging markets to offset a decline in demand.
A Gallaher spokesman said: "The approach is preliminary and there can be no assurance that any offer will be made."
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