BUZZ-Reports of ban on menthol cigs hit UK tobacco stocks; BAT, Imperial bottom of FTSE

(Adds details, updates prices)

** Media reports of a potential move by the FDA to ban menthol cigarettes weighs on British American Tobacco (Kuala Lumpur: 4162.KL - news) and Imperial Brands (LSE: IMB.L - news) shares on Monday

** Shares (Berlin: DI6.BE - news) biggest losers on FTSE 100

** BAT down 9.6 percent at 1228 GMT, after hitting lowest since Feb 2014 in early trade, with more than $10 billion wiped from market value; IMB shares down 4 percent; shares in U.S. rival Altria Group (NYSE: MO - news) slipped 3% on Friday

** The U.S. FDA plans to pursue a ban on menthol cigarettes, WSJ reports, citing senior officials

** "The FDA concluded in 2013 that menthols are harder to quit and likely pose a greater health risk than regular cigarettes", per report (https://on.wsj.com/2PonGkl)

** U.S. menthol cigarettes account for 25% of BAT's profits, per Morgan Stanley (Xetra: 885836 - news) analysts, who believe the move could further cloud long-term earnings visibility at the company

** In 2015, BAT's unit acquired the Newport brand - leading menthol brand in the U.S. and leaving it most exposed. Estimated 55 percent of its U.S. volume is in menthol, according to Wells Fargo

** Menthol, which is 36% of U.S. market, accounts for about a quarter of BAT's total EBIT and 11% of Imperial's tobacco EBIT, according to Barclays (LSE: BARC.L - news) ' analysts

** Analysts at Wells Fargo (Swiss: WFC-USD.SW - news) and Jefferies play down chances of imminent outright ban

** "The FDA has been very clear that it will adhere to a science-based approach to evaluating/acting on menthol," says Wells Fargo

** "We don't believe the science supports the assertion that menthol cigs are more harmful than non-monthol and on that basis alone, we think menthol will be difficult to ban," says Wells Fargo

** Jefferies' analysts say share reaction overdone as prohibition won't happening any time soon and if it does, users will switch into reduced risk products (RRP)