Imperial Tobacco has admitted it has approached Franco-Spanish tobacco company Altadis over a possible E11.5bn (£8bn) offer.

“Imperial Tobacco Group confirms that is has made an approach to Altadis in relation to a possible combination of Imperial Tobacco Group and Altadis at a price of E45 per Altadis share in cash. Discussions are at a very early stage and there can be no certainty that this approach will lead to an offer being made,” the group said in a statement.

Analysts speculated that Imperial may have to offer more for Altadis before a deal is agreed.