Jul. 30, 2014, 7:16 AM
- Lorillard (NYSE:LO) reports cigarette volume fell 3.4% Y/Y in Q2 - mark which is better than the estimated industry average.
- The Blu brand had an e-cig market share of close to 40% despite new competition. The Newport brand bumped up its market share by 30 bps.
- Lorillard's total retail market share for cigarettes was up 20 bps to 15.0%.
- The merger with Reynolds American is expected to close in 1H of 2015.
- LO +1.5% premarket
Jul. 30, 2014, 7:02 AM
Jul. 29, 2014, 5:30 PM
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Jul. 15, 2014, 10:53 AM
- Tobacco stocks slump as a group after Lorillard doesn't catch the premium in the Reynolds American buyout that some anticipated.
- Even Imperial Tobacco which ended up with the hot Blu e-cigarette brand as part of the deal is having trouble shaking off the pessimism.
- Decliners: Lorillard (NYSE:LO) -7.9%, Philip Morris (NYSE:PM) -1.3%, Altria (NYSE:MO) -2.1%, Vector Group (NYSE:VGR) -0.8%, Reynolds American (NYSE:RAI) -4.0%, Imperial Tobacco (OTCMKTS:ITYBY) -2.8%, British American Tobacco (NYSEMKT:BTI) -1.4%.
Jul. 15, 2014, 7:22 AM
- Reynolds American (NYSE:RAI) says it will unload the Kool, Salem, Winston, Maverick, and blu eCigs brands along with some other assets to Imperial Tobacco (OTCMKTS:ITYBY) for $7.1B. The move is aimed at appeasing regulators.
- The company says the acquisition of Lorillard (NYSE:LO) will be accretive within the first full year and will show a double-digit accretion rate in the second year and beyond.
- A cooperation deal was struck between Reynolds and British American Tobacco (NYSEMKT:BTI) which includes sharing technology and development costs on next-gen tobacco products.
- Premarket: Lorillard -3.7%, Reynolds American -0.2%, British American Tobacco (BTI) -0.5%.
Jul. 15, 2014, 7:14 AM
- Reynolds American (NYSE:RAI) announces it will buy Lorillard (NYSE:LO) in a deal valued at $27.4B.
- Lorillard shareholders will receive $50.50 in cash and 0.2909 a share of Reynold at closing, which reps a deal price of $68.88 at Reynold's current trading level.
- British American Tobacco (NYSEMKT:BTI) will hold on to its 42% stake in Reynolds as part of the deal.
Jul. 14, 2014, 7:59 AM
- The reduced pace of smoking lawsuits is helping to stoke up M&A activity in the tobacco sector, according to analysts.
- Reynolds American (NYSE:RAI) disclosed in a recent SEC filing that it faced 5K Engle-related suits in Q1 of 2014, well-off the high litigation pace of a few years ago.
- The clearer visibility on liability in the sector should help push forward deals which a few years ago would have stalled.
- Lorillard (NYSE:LO) is +0.7% to $66.48 in premarket trading.
Jul. 11, 2014, 7:18 AM
- Shares of Lorillard (LO) are higher in early trading after Reynolds American (RAI) confirms an earlier report that it's in talks with the company over a buyout.
- Reynolds says British American Tobacco will support the transaction by subscribing additional shares.
- Imperial Tobacco (ITYBY) will snap up key brands to help make the deal more likely to sail past regulators.
- LO +4.6% premarket
Jul. 11, 2014, 4:13 AM
- Reynolds American (RAI) may announce its purchase of Lorillard (LO) as early as July 14, Bloomberg reports.
- Many rumors have been circulating in the past few weeks regarding big tobacco M&A, as shrinking U.S. demand for cigarettes puts pressure on companies to team up.
- Under the current deal, Reynolds would acquire most of Lorillard, with some brands being acquired by Imperial Tobacco (ITYBY), to receive regulatory approval. British American Tobacco (BTI), who owns a 42% in Reynolds, is said to have already given the company the go-ahead for the purchase.
- The new report conflicts with another rumor heard this week stating British American Tobacco will buy the 58% of Reynolds American it doesn't already own - cancelling any possible deal with Lorillard.
Jul. 10, 2014, 2:43 PM
- Shares of Lorillard (LO +0.4%) perk back up after a report yesterday on British American Tobacco buying out the portion of Reynolds American it doesn't own threw a scare into investors.
- Some tobacco industry analyst think Reynolds buying Lorillard is still the most likeliest scenario in the coming shakeup in the sector.
Jul. 9, 2014, 8:06 AM
- There's growing speculation in the U.K. that British American Tobacco (BTI) will buy out the 58% of Reynolds American (RAI) it doesn't own already.
- A deal would likely end the pursuit by Reynolds of Lorillard (LO) which has been in the works for weeks.
- Shares of Lorillard (LO) are down 3.7% premarket, while Reynolds American (RAI) is 2.1% higher.
Jul. 3, 2014, 10:18 AM
- Shares of Lorillard (LO +4.6%) are higher after CNBC reports its sources indicate a merger of the company with Reynold American (RAI +1.6%) will be announced within weeks.
- In the deal sidecar: Imperial Tobacco (ITYBY) is expected to buy some assets in order to make the deal palatable for regulators, while British American Tobacco (BTI) is tapped to be part of the festivities as an investor in Reynolds.
Jun. 30, 2014, 6:51 AM
- A move by Imperial Tobacco (ITYBY) to sell off 30% of its holdings in Compania de Distribucion Integral Logista Holdings SA could make it easier for tobacco giants Lorillard (LO) and Reynolds American (RAI) to merge.
- Imperial Tobacco would sit with close to $800M in extra cash if it unloaded the piece in its Madrid unit.
- Shares of both Lorillard and Reynolds are up over 20% since merger talk ramped up a few months ago.
Jun. 24, 2014, 9:47 AM
- Lorillard (LO -1.9%) trades lower after Morgan Stanley downgrades the company to an Underweight rating.
- The investment firm thinks the takeover premium on Lorillard has outrun itself to offer investors very little upside.
- There's also some caution issued on the risk of the menthol-heavy Newport brand.
- What to watch: Look for a defense from Wells Fargo analyst Bonnie Herzog who is far out on the Lorillard limb.
Jun. 24, 2014, 3:51 AM
- The $96B tobacco bond market is continuing its decline, as most Americans have quit smoking at a faster rate than estimated when most of the bonds were sold in previous decades. Health risks, public smoking bans, e-cigs and new excise taxes have all been factors in the decrease.
- A forecast last month from Moody's Investors Service estimates 65-80% of tobacco bonds are headed toward default, and many analysts predict the default to occur by the end of the decade.
- Cigarette consumption fell an annual average of 3.4% since 2000, while many bonds were set up to only withstand drops of 2-3%. E-cigarettes have also diminished market share, with sales growing by more than $2.2B in the last four years.
- Related tickers: (MO) (BTI) (LO) (PM) (ECIG) (VAPE) (HPNN) (MCIG) (NTRR) (VAPR) (VPCO) (RAI) (AHII)
Jun. 18, 2014, 9:02 AM
- Wells Fargo analyst Bonnie Herzog is fairly confident (90%) that a deal in which Reynolds American (RAI) pays up to $80 per share for Lorillard (LO) is still likely (CNBC interview video).
- Herzog thinks a combination of the two companies will "catapult" the e-cigarette business.
- LO +2.0% premarket to $63.01 giving investors plenty of upside still if the Wells call is correct.
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Lorillard Inc is engaged in the manufacture of cigarettes and tobacco in the United States. The Company's 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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