BAT shares dip amid U.S. lawsuit nerves
11/02/99
LONDON, Nov 2 (Reuters) - British American Tobacco (BAT) fell on Tuesday, tracking overnight losses in U.S. cigarette makers, as the penalty phase of a landmark Florida multi-billion dollar lawsuit against the industry started in Miami, dealers said.
By 1152 GMT, BAT dipped 8-1/2p or 2.15 percent to 386p.
Imperial Tobacco and Gallaher, which neither make nor sell cigarettes in the United States, gained 0.9 percent and 0.5 percent respectively.
In New York, the two biggest U.S. cigarette makers, Philip Morris and R.J. Reynolds Tobacco, dropped between five and six percent. Morris shed $1-1/2 to $23-11/16, while R.J. Reynolds slipped $1 to $20-11/16.
The ADRs of BAT, whose U.S. subsidiary Brown & Williamson is the third largest tobacco firm in the U.S., dropped $9/16 to $13/17.
``Clearly this lawsuit is the overriding factor determining BAT share price at the moment,'' said WestLB Panmure analyst Charles Pick.
Investors' anxiety intensified two weeks ago when an appeals court ruling refused to shelter the tobacco industry from punitive damages in the class action suit, raising the prospect of another big payout by cigarette makers over smoking-related illnesses.
BAT shares tumbled 20 percent in two days in repsonse to the ruling, sinking to a 12-month low of 375 pence.
BAT has said it is confident the class action could be foiled. The company pinned its hopes in part on a previous ruling by a Florida court, which limited damages for victims of smoking-related illnesses to awards on an individual basis, rather than en masse.
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