Seeking Alpha

Tobacco merger talk picks up

  • Bankers and lawyers are busy working on potential mergers in the tobacco industry, reports CNBC (video).
  • The biggest buzz is over the potential that Reynolds American (RAI +1.4%) will buy Lorillard (LO +3%) for as much as $80 per share.
  • Though Wells Fargo notes Reynolds would have to divest some significant menthol brands to get a Lorillard deal past regulators, the firm sees a deal as likely.
  • Other tobaccco players: MO, PM, BTI, ITYBY, ITYBF, PHJMF, JAPAF, SFIO, VGR, SWNG, SWMAF, SWMAY, XXII, BTAFF, UVV
Comments (14)
  • ISRG buyer
    , contributor
    Comments (229) | Send Message
     
    If a buyout is roughly 80 why isn't the stock up more. A potential bid like that should at least push the stock into the mid 60's
    29 Apr, 01:20 PM Reply Like
  • arthur_bishop1972
    , contributor
    Comments (2142) | Send Message
     
    Good point. I think we'll see the pps move up substantially when those in the know feel the deal has moved to a point where the merger (buyout, whatever) is imminent. Whether it's regulatory or something else holding things up, we're still in the 1st or 2nd inning of this imo.
    29 Apr, 01:58 PM Reply Like
  • U2A Ventures
    , contributor
    Comments (141) | Send Message
     
    agreed. surprised it didnt pop.
    29 Apr, 02:37 PM Reply Like
  • Fatherbear
    , contributor
    Comments (12) | Send Message
     
    The key word is "potential". Time will tell.
    29 Apr, 03:58 PM Reply Like
  • petpirhana
    , contributor
    Comments (44) | Send Message
     
    Here's one to chew on .....Menthol is more addictive then nicotine....proven fact in clinical studies. If you don't believe ask someone who smokes menthol what would it take them just to smoke regulars cigs......."Are you crazy"...
    29 Apr, 02:34 PM Reply Like
  • mwaldman
    , contributor
    Comments (31) | Send Message
     
    If you actually mean what you said, that "menthol is more addictive than nicotine" ... that's clearly false. Menthol is a widely-used flavorant ... who gets addicted to menthol cough drops?

     

    If you mean to say that menthol cigarettes are more addictive than non-menthol cigarettes, well, now we're getting into the realm of possibility ... The FDA's preliminary assessment of menthol is here: http://1.usa.gov/1mVlBa4

     

    Some key lines from page 113:
    "Cpd and FTND, two measures that have historically been used to assess nicotine dependence, find no consistent effect of menthol. In contrast there is consistent evidence that menthol smokers are more likely to smoke their first cigarette within 5 min of waking ... indicating more severe dependence. ... As with TTFC, other measures of dependence consistently indicate that menthol smokers are more dependent as compared to nonmenthol smokers."
    29 Apr, 04:19 PM Reply Like
  • JohnBinTN
    , contributor
    Comments (3573) | Send Message
     
    As a smoker (boo, me!), and a menthol smoker to boot, I will just add that I would rather not smoke than smoke a non-menthol cigarette.
    29 Apr, 07:15 PM Reply Like
  • petpirhana
    , contributor
    Comments (44) | Send Message
     
    The gold is in the Menthol
    29 Apr, 02:37 PM Reply Like
  • Sunshine123
    , contributor
    Comments (609) | Send Message
     
    What is the scenario with BAT in the picture as a potential buyer of Reynolds
    Tobacco Co.?
    29 Apr, 04:10 PM Reply Like
  • xyzzyx
    , contributor
    Comments (2) | Send Message
     
    afaik BAT holds a 42% Sake in Reynolds
    29 Apr, 05:33 PM Reply Like
  • Riskman
    , contributor
    Comments (119) | Send Message
     
    BAT cannot increase Reynolds ownership under a 10 year agreement from an asset sale which expires this July.
    29 Apr, 10:55 PM Reply Like
  • Riskman
    , contributor
    Comments (119) | Send Message
     
    If Reynolds buys LO, it dilutes BAT ownership in Reynolds. Will BAT like that? BAT buys LO and is too big for BAT to eat Reynolds. Yummy eat them up...PAC man effect!
    29 Apr, 10:58 PM Reply Like
  • Riskman
    , contributor
    Comments (119) | Send Message
     
    If Reynolds buys LO, it dilutes BAT ownership in Reynolds. Will BAT like that? BAT buys LO and is too big for BAT to eat Reynolds. Yummy eat them up...PAC man effect!
    29 Apr, 10:58 PM Reply Like
  • Riskman
    , contributor
    Comments (119) | Send Message
     
    Sorry....It's if Reynolds buys LO and is too big for BAT to eat Reynolds.
    29 Apr, 11:01 PM Reply Like
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