Tue, Sep 16, 2014, 8:11 AM EDT - U.S. Markets open in 1 hr 19 mins


% | $
Quotes you view appear here for quick access.

Lorillard, Inc. Message Board

  • only_an_opinion only_an_opinion Jul 15, 2014 2:40 PM Flag

    Explain why LO is above $50.50 per share

    Ok so if they offered $50.50 per share, why should it be selling above $50.50? I know there is value in the .29 shares of RAI but if I get $50.50 in 2015 why pay more now? I am long but am I crazy?

    Sentiment: Hold

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • At the price LO is at now, I had to buy in today. RAI would have to fall below $39 for me to begin to lose money which I don't see happening. Also I collect a 4% dividend. Essentially the only risk is that the government kills the deal in its current state. However, I think a deal can still be made between the three companies if the government wants more divestitures.

    • The .29 shares of RAI is worth $18 currently with RAI now at $60. So based on today's price you'll receive about $68 for your LO shares. If RAI is $80 a year from now, you get about $74 ($50.50 cash plus $24 worth of stock) in value for your LO shares. If RAI is $40, you get about $62 for your LO shares. This is the way I look at it.

    • Do you feel that the .2909 of RAI is worth $0? The "value" of a LO share today is $50.50 plus the value of .2909 of a RAI share [this ignores present value element of the cash]. So the question is what do you think RAI will trade at just before the deal is completely done.

59.03-0.05(-0.08%)Sep 15 4:03 PMEDT

Trending Tickers

Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.