Sunday share tips: Imperial Tobacco, Real Estate Investors

A carve-up of Imperial Tobacco is back on the table, with speculation in that regard sending the stock up by 13% over the past month and by 6% in just the last week.

British American Tobacco and Japan Tobacco considered just that in 2012 and following Anheuser-Busch InBev’s approach for SAB Miller, any deal now seems possible.

The likes of Philip Morris and even China’s state tobacco company might also be tempted to join in.

Known for its commitment to shareholder value, Imperial is seen snapping up an offer if it is in shareholders' best interest.

Last year's deal to scoop up the American cigarette brands cast off by Reynolds and Lorillard may make the company that much more appealing to Japan Tobacco.

Once considered to be cheap, that is no longer true, "but they still look good value — especially with predators beginning to circle. Buy," says Peter Evans in the Sunday Times's Inside the City column.

Real Estate Investors's chief Paul Bassi is upbeat and not without reason given his plans for the company going forward.

The Birmingham-focused outfit buys neglected properties, spruces them up and then rents them out as offices or shops.

Situated in the fastest-growing city outside of London it is seen very strong demand both for rental properties and for those it chooses to sell.

Just this year, REI purchased a property in April for £1.85m and sold it for £2.5m three months afterwards.

Critically, the firm refurbishes those assets it buys, helping to compensate for soaring valuations as buyers want to be able to rent them out and receive the resulting income quickly.

As well, prices for some of the most unloved assets are still keen.

The group raised £45m in April to finance an increase in its portfolio to £200m by the end of the year from £130m at present.

REI also converted into a real estate investment trust this year.

"Investors may wish to sell some shares to bank a bit of profit, but they should hold on to most of their stock. Long-term investors may also find value in this business," said the Daily Mail on Sunday's Midas column.