(Bloomberg) --

Elliott Investment Management LP, the biggest shareholder of Swedish Match AB, is backing Philip Morris International Inc.’s $16 billion bid for the nicotine pouch maker, the Financial Times reported. 

PMI’s offer had received more than 80% of shareholder acceptances as of the latest count on Friday after the bid expired, and more may be processed on Monday, the FT reported, citing two people familiar with the matter. 

The report suggests Philip Morris International could be on track to win its improved offer for Swedish Match. Elliott Investment Management holds a 10.5% stake and had the potential to block the deal which has a minimum 90% acceptance rate. 

Even if PMI fails to achieve the 90% acceptance rate it could lower the threshold now that the bid has expired. That could allow the Swiss tobacco company to gain full control of the nicotine pouch maker if its offer of 116 Swedish kroner ($10.50) per share meets the minimum acceptance threshold, allowing it to squeeze out any remaining shareholders who don’t tender their stock. 

A PMI spokesman declined to comment on the report. 

Swedish Match and its US distribution network would give Philip Morris a foothold in the biggest market for smoking alternative products including vaping devices, nicotine pouches and heated tobacco. The biggest industry players have been jostling for position with a series of moves designed to gain market share. 

A successful takeover would accelerate the goal of the maker of Marlboro cigarettes for the international market to get 50% of its revenue from alternative smoking products by 2025. 

The board of Swedish Match had recommended shareholders accept PMI’s sweetened offer, which represented a 52% premium to the closing price before the deal was announced. 

Elliott increased its stake in Swedish Match to 10.5% on Oct. 24, according to a filing from the Swedish financial regulator. The hedge fund had previously disclosed a 7.5% stake. 

Bloomberg News reported in July that the activist investor and other hedge funds planned to oppose PMI’s initial bid because it undervalued Swedish Match.  

(Updates with bid details and FT reporting beginning in paragraph 4)

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