(Bloomberg) -- British American Tobacco Plc, the maker of Lucky Strike cigarettes, is preparing to kick off a sale of part of its stake in Indian partner ITC Ltd. as soon as this week, people with knowledge of the matter said. 

London-listed BAT has been speaking with Bank of America Corp. and Citigroup Inc. about a potential divestment of around $2 billion to $3 billion in ITC stock through block trades, the people said.

Such deals are usually done at a discount to the market price. Details of the transaction could still change, and the launch of the offering may spill into next week depending on market conditions, the people said, asking not to be identified because the information is private.

BAT confirmed in a statement that it’s evaluating a possible disposal of a “small part” of its ITC shareholding through an on-market block trade. There’s no certainty on the terms of any potential transaction or whether the deal will move ahead, it said. 

Shares of BAT rose after the Bloomberg News report and were up 1.4% at the close Monday in London. They’re down 23% over the past 12 months. ITC shares fell 2.5% in early trading in Mumbai on Tuesday, headed for their lowest close since April. ITC has slipped 13% in 2024 after more than doubling over the preceding two years.

BAT currently owns about 29% of Mumbai-listed ITC, according to data compiled by Bloomberg. ITC, an Indian conglomerate that gets a large portion of its revenue from cigarettes, also runs a variety of other businesses including food products and packaging. It also has a hotel business that it’s in the process of spinning off.

Representatives for Bank of America and Citigroup declined to comment. A spokesperson for ITC couldn’t immediately be reached for comment outside regular business hours. 

--With assistance from Andy Hoffman, Dinesh Nair and P R Sanjai.

(Adds ITC share move in fifth paragraph)

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