(Bloomberg) -- Reinet Investments SCA agreed to sell its 2% stake in British American Tobacco Plc for £1.22 billion ($1.49 billion), exiting its long-running position in the company.

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BAT shares slumped as much as 2.9% on Tuesday for its sharpest intraday drop since October. Reinet said its offering of about 43.3 million shares in the London-listed group via JPMorgan Chase & Co. priced at £28.20 per share, marking a 3.9% discount to the prior closing level.

“A plan by BAT long-term shareholder Reinet to sell its 2% holding in a share placing shouldn’t affect the tobacco company’s commitment to delivering a £900 million share buyback in 2025,” Bloomberg Intelligence analyst Duncan Fox wrote in a note.

Investor demand had exceeded the amount of stock being offered shortly after the deal was launched, according to a message seen by Bloomberg.

Luxembourg-based Reinet was formed out of Swiss luxury group Richemont in 2008. The tobacco company stake amounted to about one-fourth of Reinet’s net asset value, according to a report last year. Reinet said it intends to use the proceeds from the sale for its “ongoing investment activity.”

BAT makes Lucky Strike cigarettes, Vuse vapes and Velo nicotine pouches. In recent years, the tobacco group, like rivals, has been focusing on pursuing smoke-less products as it seeks to move away from cigarette sales.

Last year, the company took a writedown on the value of its US cigarette brands as more smokers give up the habit, with many switching to alternatives like vapes, nicotine pouches and heated tobacco sticks.

(Updates with pricing and stock reaction in first paragraphs, and additional details in the fifth paragraph.)

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