The owners of Scandinavian Tobacco Group A/S, a Danish manufacturer of cigars, are in talks with private-equity firms about a possible sale of the company, people with knowledge of the matter said.
CVC Capital Partners Ltd, Rhone Capital LLC and Pamplona Capital Management LLP, are bidding for the Copenhagen-based company, said six people, who asked not to be identified because the talks are private.
The cigar company's owners, Skandinavisk Holding A/S and Swedish Match AB (SWMA), hired JP Morgan Chase & Co (JPM) to look at options for the business last year and explored an initial public offering before deciding on a sale, said the people. The company could fetch about $2 billion, the people said.
Swedish Match jumped the most since May, with shares up 2 per cent as of 4:51 p.m. in Stockholm trading.
STG employs about 9,500 people in 20 countries and reported earnings before interest, taxes, depreciation, and amortisation of 1.2 billion kroner ($201 million) on revenue of 5.9 billion kroner for 2013, according to the company's annual report.
The company, whose history dates back more than 200 years, merged in 2010 with a cigar and pipe tobacco business of Swedish Match, and is the world's largest manufacturer of cigars and pipe tobacco, according to its website.
Officials for STG, CVC, Pamplona, Skandinavisk and JPMorgan declined to comment.
A spokesman for Swedish Match confirmed they had hired an investment bank but declined to provide further detail. A spokeswoman for Rhone Capital didn't respond to telephone requests seeking comment.
