May. 22, 2014, 10:36 AM
- Shares of Lorillard (LO -5.5%) retreat after reality sets in that a deal for the company to be purchased by Reynolds American (RAI -1.8%) is complicated and could take some time to work out. The third wheel in the merger mix is British American Tobacco (BTI -0.9%) which owns 42% of Reynolds and could make a play for the whole company after a standstill agreement expires in July.
- Analysis is divided on if a deal will end up being completed at all. Stifel thinks regulators will jump in over the dominance in menthol a combination of the tobacco companies would create - while Wells Fargo's read is much more optimistic.
- Vector Group (VGR -1.6%) has been taken for a ride along with Lorillard and Reynolds, popping yesterday and deflating today.
May. 21, 2014, 3:57 PM
- Reynolds American (RAI +4.3%) and Lorillard (LO +9.9%) are in advanced talks on a merger, according to new reports.
- There has been much discussion over the last two months on a combination of the two tobacco giants with Wells Fargo rating the chance of a deal at 80%.
- Both stocks have spiked late in the day off the latest development.
May. 20, 2014, 9:01 AM
- British researchers find that e-cig users have a 60% higher success rate in quitting than those who use smoking cessation products like patches or gum or willpower alone. In a five-year study of almost 6,000 smokers, almost 20% of those who switched to e-cigs stopped smoking conventional fags. Only ~10% of those using patches or gum managed to quit. Slightly more than 15% quit using their willpower.
- The long-term effects of vaping are unknown at present but they appear to be less bad than tobacco.
- Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (MWIP) (NTRR) (VAPR) (VPCO)
May. 16, 2014, 2:06 PM
- The Minnesota Legislature passes a bill restricting the use and sale of electronic cigarettes. It now heads to Governor Mark Dayton's desk for his signature.
- The bill requires child-proof packaging for all e-cig liquids, prohibits their use in schools, prohibits their sale from mall kiosks and requires them to be kept behind the counter in stores. The law allows local governments to pass more stringent restrictions and ensures penalties for those who sell e-cigs to minors.
- E-cig use is also banned in hospitals, healthcare clinics, doctors' offices, most government buildings, all facilities owned by the University of MN or MN State Colleges and Universities, including dorm rooms and licensed daycare facilities, including home daycare during operating hours.
- The bill is a watered down version of an earlier bill that would have treated e-cigs the same way as conventional cigarettes.
- Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (MWIP) (NTRR)
May. 15, 2014, 3:02 PM
May. 13, 2014, 7:29 PM
- U.S. exchanges are now unified in canceling some wild trades in (AOL -3.1%) in a two-minute span just 10 minutes before the close.
- The odd trades, traced to a trading firm's mistake, also affected dealing in Nabors (NBR), Lorillard (LO -1.3%), Marathon Petroleum (MPC -0.3%), Canadian Natural Resources (CNQ +0.3%), Nasdaq OMX (NDAQ -0.9%) and Caterpillar (CAT +0.9%), among others -- but those trades will be left standing.
- The NYSE will bust AOL trades of $33.17 or below, while Nasdaq, Direct Edge and NYSE Arca will cancel those at $33.16 and below.
May. 13, 2014, 5:45 PM
- Investors betting on a potential deal between Reynolds American (RAI) and Lorillard (LO) might want to change their thinking: That appears to be the message of RAI CEO Susan Cameron, who downplayed such speculation today at a Goldman Sachs investor conference.
- The CEO also swatted down talk that British American Tobacco might raise its 42% stake in RAI after a 10-year standstill agreement preventing a hostile takeover expires in July, saying "I don’t see BAT as a stealth predator. I see them as a partner."
- Cameron also said investors shouldn’t speculate that her sudden, surprise return to the RAI helm after leaving three years ago means a deal is more likely; predecessor Dean Delen decided to retire a bit sooner than planned strictly for family reasons, prompting the board to ask her to take over again.
May. 12, 2014, 9:55 AM
- British American Tobacco (BTI) has hired bankers to advise it on a potential acquisition in the U.S., according to The Times.
- U.S. firms are a step ahead of BAT in some growth channels including e-cigarettes.
- Shares of Reynolds American (RAI +3%) and Lorillard (LO +1.9%) are both higher on the day off the development.
- Potential consolidation in the tobacco industry has been a hot topic over the last month and has already helped to prop up share price in the group.
Apr. 30, 2014, 10:20 AM
Apr. 29, 2014, 12:55 PM
- 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
Apr. 24, 2014, 3:33 PM
Apr. 24, 2014, 12:57 PM
- Tobacco stocks brush aside news that the FDA is moving closer to regulating the e-cigarette industry.
- Lorillard (LO +1.1%), Altria (MO +0.6%), Reynolds American (RAI +1.5%), Vector (VGR +1.1%), and Philip Morris (PM +0.6%) are all in positive territory for the day.
- The early read on the action by the FDA is that it may favor the larger players in the e-cig industry as the barriers to entry become more rigid.
Apr. 24, 2014, 4:41 AM
- The FDA is set to unveil proposals to regulate electronic cigarettes, which will include an eventual ban on sales to anyone under 18. Manufacturers will also have to gain FDA approval for their products, disclose the chemicals used in the devices and add health warning about the addictiveness of nicotine.
- The measures don't include a ban on TV ads, online sales or flavored versions.
- Lorillard (LO) commands almost 50% of the e-cigarette market in convenience stores, while Altria Group (MO) and Reynolds American (RAI) are starting to ramp up their offerings.
Apr. 17, 2014, 7:08 AM
- As e-cigarettes grow in popularity so have instances of burns, toxicity and respiratory and cardiovascular problems. Over the past 12 months, 50 complaints were filed with the FDA which matches the total for the previous five years.
- The FDA is poised to regulate the $2B industry which some observers believe will overtake tobacco's $85B in ten years.
- The long-term effects of vaping are unknown.
- Most e-cigarettes are made in China and sold under more than 300 brands in the U.S.
- The quality of the brands varies widely so some manufacturing has moved to America.
- (MO) (BTI) (LO) (PM) (ECIG)
Apr. 11, 2014, 9:06 AM
- In its latest effort to curtail smoking, the Chinese government proposes a ban on using its money to buy cigarettes as gifts or to be provided at official functions. The rule also seeks a ban cigarette advertising and smoking in public places like schools, train stations and hospitals. Miscreants would pay fines up to $32.
- China is the world's largest tobacco market. A ban on smoking in certain public places is already in effect but is largely ignored.
- (MO) (BTI) (LO) (PM)
Apr. 9, 2014, 2:44 PM
- Nomura dives into the tobacco industry to pick winners and losers.
- The investment firm's preferred pick is Reynolds American (RAI +1.1%) which shows "superior" profit growth potential in relation to peers. RAI is rated a Buy with a $66 price target.
- Altria (MO +0.6%) was initiated at Neutral as Nomura takes its 2015 EPS view to below consensus.
- The rating on Lorillard (LO -2.3%) is set at Reduce by the firm due to the inflated acquisition premium the market is giving the company.
LO vs. ETF Alternatives
Lorillard, Inc. is engaged in the manufacture of cigarettes and tobacco in the United States. Its principal products are marketed under the brand names of Newport, Kent, True, Maverick and Old Gold with sales in the United States of America.
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