Transaction Would Exchange Carolina Group Tracking Stock for Shares of Lorillard
NEW YORK--(BUSINESS WIRE)--Dec. 17, 2007--Loews Corporation
(NYSE:LTR; CG) today announced that its Board of Directors has
approved a plan to spin off its entire ownership interest in
Lorillard, Inc. to holders of its Carolina Group stock and Loews
common stock in a tax free transaction. As a result of the
transaction, Lorillard, presently a wholly owned subsidiary of Loews,
would become a separate publicly traded company.
"This transaction is consistent with our unrelenting focus on
long-term value creation," said James S. Tisch, Chief Executive
Officer of Loews. "A spin-off of Lorillard will benefit both companies
as well as the holders of Loews common stock and Carolina Group
stock."
The transaction would be accomplished through the following steps:
-- Loews would effect a redemption of all of the outstanding
Carolina Group stock in exchange for shares of common stock of
Lorillard, in accordance with the terms of the Carolina Group
stock contained in the Restated Certificate of Incorporation
of Loews. Holders of Carolina Group stock would receive one
share of common stock of Lorillard for each share of Carolina
Group stock they own. The Lorillard shares distributed in the
redemption of the Carolina Group stock would constitute
approximately 62% of Lorillard's outstanding common stock,
which is the percentage of the economic interest in the
Carolina Group that is allocated to the outstanding Carolina
Group stock.
-- Loews would dispose of the remaining 38% of Lorillard's
outstanding common stock in an exchange offer for shares of
outstanding Loews common stock if Loews determines that market
conditions are acceptable for an exchange. If Loews determines
not to effect the exchange offer or the exchange offer is not
fully subscribed, the remaining shares of Lorillard would be
distributed as a pro rata dividend to the holders of Loews
common stock.
Loews currently has two classes of common stock outstanding:
Carolina Group stock, which is intended to reflect the economic
performance of a group of assets and liabilities called the Carolina
Group, principally consisting of Lorillard and its subsidiaries; and
Loews common stock, representing the economic performance of the
remaining assets of Loews, including the interest in the Carolina
Group not represented by outstanding Carolina Group stock.
Loews expects that Lorillard's common stock will be listed for
trading on the New York Stock Exchange. Following the spin-off, Martin
L. Orlowsky will continue to serve as Chairman, President and CEO of
Lorillard, and Lorillard's corporate headquarters will continue to be
in Greensboro, North Carolina.
Completion of the proposed transaction is subject to a number of
conditions including receipt of a favorable ruling from the Internal
Revenue Service and an opinion of tax counsel as to the tax-free
nature of the transaction, Securities and Exchange Commission
clearance, the absence of any material changes or developments, final
approval by the Loews Board of Directors and market conditions.
Approval by shareholders of Loews is not required. The spin-off is
expected to be completed in mid-2008.
This press release does not constitute an offer of any securities
for sale.
Investor Conference Call on Monday, December 17 at 9:00 a.m. EST
Loews will hold a conference call on Monday, December 17, 2007 at
9:00 a.m. EST to discuss the planned spin-off. A live webcast of this
conference call will be available online at the Loews website
(www.loews.com). Those interested in participating in the question and
answer portion of the conference call should dial 877-692-2592, or for
international callers, 973-582-2757. The conference ID number is
28562156.
Following the call, a replay will be available at www.loews.com or
by dialing 800-642-1687, or for international callers, 706-645-9291.
The telephone replay will be available through December 24, 2007.
About Loews
Loews Corporation, a holding company, is one of the largest
diversified corporations in the United States. Its principal
subsidiaries are CNA Financial Corporation (NYSE: CNA); Lorillard,
Inc.; Boardwalk Pipeline Partners, LP (NYSE: BWP); Diamond Offshore
Drilling, Inc. (NYSE: DO); HighMount Exploration & Production LLC;
Loews Hotels; and Bulova Corporation.
About Lorillard
Lorillard, Inc. is engaged, through its subsidiaries, in the
production and sale of cigarettes. The principal cigarette brand names
of Lorillard are Newport, Kent, True, Maverick and Old Gold.
Lorillard's largest selling brand is Newport, the second largest
selling cigarette brand in the United States and the largest selling
brand in the menthol segment of the U.S. cigarette market.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995.
Such statements are inherently subject to a variety of risks and
uncertainties that could cause actual events to differ materially from
those described. Important factors that could cause actual events to
differ from those described include, but are not limited to,
satisfaction of the conditions noted herein to completion of the
proposed spin-off transaction. Therefore, no assurance can be given
that the spin-off will be consummated on the currently proposed terms
or otherwise. Loews expressly disclaims any obligation or undertaking
to release publicly any updates or revisions to any forward-looking
statement to reflect any change in expectations with regard thereto or
any change in events, conditions or circumstances on which any
forward-looking statement is based.
CONTACT: Loews Corporation
Peter W. Keegan, 212-521-2950
Chief Financial Officer
or
Investor Relations
Darren Daugherty, 212-521-2788
or
Public Affairs
Candace Leeds, 212-521-2416
SOURCE: Loews Corporation
