Altadis has hired three investment banks to advise it after the Franco-Spanish tobacco group received an approach from Imperial Tobacco, a source familiar with the situation said on Tuesday.
The source said Altadis had named Rothschild, Credit Suisse and JP Morgan to advise it on its options.
"They haven't been hired to find another bidder because Altadis has its own business plan," the source said, adding the advisers would look at how to extract more value from the firm.
Imperial approached Altadis last week, offering 45 euros a share and valuing the company at 11.5 billion euros ($15.30 billion). Altadis said the offer was too low and its share price has since jumped to 46.49 euros.
Imperial has said it wants to continue talks on a friendly basis, but analysts have said the British tobacco company could go hostile and approach Altadis shareholders directly.
In the meantime, analysts and media have speculated on alternative bids.
Some see Altadis teaming up with Philip Morris owner Altria to make a counterbid for Imperial, but the source said Altadis had poured cold water on that option.
"Even together with a partner, it would require Altadis to raise too much debt so it has been ruled out," the source said.
Spanish newspaper Expansion reported that Altadis management could consider teaming up with a private-equity group to launch their own buyout-bid for Altadis, while El Economista reported U.S. private-equity group KKR was also looking at an offer.
Altadis declined to comment.
Altadis has been seen as an attractive target for private-equity firms as its three-pronged business of cigarettes, cigars and distribution makes it a prime candidate for a break-up, with any buyer selling off individual units at a profit.