The transaction will close as of trading on Tuesday, June 10. Lorillard is being distributed to the public via a two-tier process involving: 1) the retirement of the tracking stock Carolina Group (NYSE: CG), in exchange for which approximately 62% of Lorillard's common stock will be issued, and 2) an offer in which shares of S&P 500 constituent Loews Corp. can be exchanged for the remaining shares of Lorillard
It was a smart move by Loews company management to separate the tobacco company from its other interests in hospitality, oil exploration, real estate and insurance.
Lorillard is a producer and seller of cigarettes, under brand names including Newport, Kent, True, Maverick and Old Gold. Headquartered in Greensboro, NC, the company will be added to the S&P 500 GICS (Global Industry Classification Standard) Tobacco Sub-Industry index.
LTR is up $1.37 in afternoon trading to $51.87; Lorillard Inc. has not begun to trade yet.
UPDATE: closing price $50.54, +$1.04 for the day (+2.10%)
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. DISCLOSURE: I do not own LTR or LO.
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