Wouldn't longs actually be better off if there is no deal?
Aren't ecigs going to be one of those products that changes the world in the near future? Isn't Lorillard the leader in ecigs? Won't ecigs be sold to a massive market? Isn't that actually a better situation than say a TSLA would provide? Without a deal aren't revenues growing already? Aren't dividends growing already? Aren't the number of shares on the market shrinking as they constantly buy more back? Wouldn't the only reason another company would be interested be because they know the company is worth more than they'd be paying for it? While a buy-out would definitely give the longs a nice chunk of change in one pop wouldn't we actually be better off in the long run if no deal happens?
Not really. A buyout would produce significant cost savings from consolidation of manufacturing plants (due to slow but steady decline in demand for cigarettes less factories are needed), overall reduction in sales force size, and merged distribution channels, which would translate to higher profits for all shareholders of the combined companies. I say bring it on.
There are good points you make, but the future is always uncertain. If an offer came for say $70/share, I would be happy. It is only a matter of time before Altria and PM get going on increasing their e-cig business, so Lorillard's lead will get whittled down a lot in that category. Without a deal, LO will IMO continue to trade at a discount to the big boys due to being so dependent on menthol sales.