British American Tobacco's (LON: BATS ) attempt to acquire disposable e-cigarette brand ElfBar last year was, at best, a questionable move if the story was true at first, according to analysts at Jefferies.

Today's grocery story, citing a senior source, said BAT first approached the vaping group in August last year but was ultimately turned down in December.

"If true, while we see no problem with acquisition competition, and it's a playbook for the old cigarette model that is likely to be a key driver of future e-cigarette consolidation, we worry that this particular deal could be seen as a possible Report, BAT is smart."

The Daily Mail reported that ElfBar devices sold in supermarkets contained liquid nicotine levels that exceeded the legal limit by 50 per cent, which the company blamed on a one-off error.

"Additionally, it almost certainly won't help its PMTA regulatory prospects in the U.S., in our view."

Jefferies added that in the UK and US, where there is controversy surrounding ElfBar and teenage use, it is likely that disposables will face strict regulation sooner or later.

"In this context, this particular deal doesn't make sense to us, either in terms of profit prospects or reputational/regulatory prospects."

Finally, Jefferies questioned whether the story might embarrass the tobacco giant as it recently tried to get regulators to take action on ElfBar disposables.

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