British American Tobacco’s mantra that Altadis’ assets are overvalued is starting to wear a little thin. BAT may indeed believe that Imperial Tobacco’s €12 billion bid for the Franco-Spanish cigarette maker is expensive.

But the real problem for BAT is that arch rival Philip Morris would not stand for a BAT takeover of Altadis, which distributes cigarettes for both companies. Philip Morris almost ditched its distribution agreement with Italy’s ETI when BAT acquired the company in 2003.

The deal was only saved when BAT sold the distribution arm to Altadis. If BAT was to bid it would have to find a buyer for Altadis’ logistics operation, or risk losing millions when Philip Morris takes its ball home.

For its part, Altadis is still bobbing and weaving around Imperial’s €47 per share offer, so BAT might look insane bidding for a company that appears set on independence. Or maybe Altadis has been waiting for BAT all along.

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