Reynolds, Lorillard share prices rise after media report
WINSTON-SALEM, N.C. — Another round of speculation involving a potential Reynolds American Inc. deal for Lorillard Inc. sent both companies’ share price up again Thursday, according to the Winston-Salem Journal.
Spurring the latest movement was a report by CNBC that the deal could be announced by the end of the month.
Lorillard’s share price jumped $3.26, or 5.3 percent, to close Thursday at $64.41. Its share price has risen 29.4 percent from $49.76 since rumors of the potential deal surfaced March 3.
Reynolds’ share price increased $1.40, or 2.3 percent, to close at $61.56. Its share price has risen 21.8 percent from $50.54 on March 3.
CNBC tied its report to unnamed sources, who pegged the timing to the expiration of a 10-year moratorium on British American Tobacco Ltd. buying more Reynolds stock on July 30. BAT has owned 42 percent of Reynolds’ stock since Reynolds bought Brown & Williamson Tobacco Corp. in July 2004.
The Winston-Salem Journal has reported that BAT is likely to have a major say in a Reynolds-Lorillard transaction because of that ownership stake, including potentially supplying Reynolds with funding to pull off a potential $18 billion to $29 billion deal.
On Monday, speculation swirled that the potential deal could be aided by Imperial Tobacco Group PLC’s possible attempt to free up resources to buy Reynolds’ non-growth brands, such as Kool, Winston, Salem and Doral.