Japan Tobacco is poised to offer about $1.5 billion (£744 million) for the cigarette business of Tekel, the Turkish company, in a move expected to trigger a bidding war between Asian and European rivals.

JT’s offer, according to sources close to the company, is likely to be launched within six weeks and comes as representatives of Tekel yesterday arrived in London for an investment roadshow, organised by Citigroup, for potential buyers.

Japan Tobacco, analysts said, is likely to face counterbids from British American Tobacco and JT’s smaller rival, Korean Tobacco & Ginseng.

Opportunities for established players to grow in emerging markets are running out, placing a premium on privatised state companies such as Tekel. BAT has made no secret of its interest in the Turkish company. JT insiders said that the company remains in aggressive pursuit of market share and is buoyant after its acquisition of Gallaher — a deal that the company’s president said could produce an additional £200 million in annual profits by 2010.

That deal raised JT’s global cigarette market share to 10.8 per cent and put it within striking distance of BAT, the world’s second-largest player, with 12.3 per cent.

The Turkish Government has been planning to privatise Tekel for more than five years. It is understood to be soliciting bids in the third attempt to find a buyer for the company and its six factories.

In 2003, JT offered $1.15 billion but its bid was rejected. Since then, Tekel’s market share in Turkey has fallen from 45 per cent to 34 per cent, which is likely to weaken the bargaining hand of the state’s privatisation administration and reflects the growing strength of Philip Morris International, which already controls 43 per cent of Turkish cigarette sales and, therefore, is unable to bid for Tekel on competition grounds.

JT, BAT and other potential bidders regard Turkey as an attractive market because the advances of Philip Morris prove that the country’s smokers have reached the critical point where they upgrade from local makes to premium foreign brands. JT’s top names include Winston and Mild Seven.

Analysts said that it was unlikely that Imperial Tobacco would enter any battle for Tekel because its management is focused on its bid for Altadis.

Imperial said last week that its £8.8 billion bid for the Franco-Spanish group had not been thrown off course by the funding problems that have hit some companies since the American sub-prime debacle.

Erik Bloomquist, tobacco analyst at JPMorgan, said that the strongest bids for Tekel would be most likely to come from Japan Tobacco and BAT, both of which have balance sheets that would permit offers in the $1 billion to $1.6 billion range.

In a note to investors last week, he said that a sale of Tekel would set the scene for the short-term consolidation of the sector. He wrote: “The remaining deals in the next one to three years are likely to be privatisations similar to Tekel.”

“Other potential assets include Eastern Company (Egypt) and the state companies in Algeria, Tunisia, Thailand and Taiwan.”

In the longer term, he said, investors should expect combinations between Chinese and Western companies.

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