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Any thoughts on this LO-RAI deal????
#1
Have some LO with which we are up $1400.

(Yes, every now and then a blind squirrel finds a nut)

Do I (we) hold....and take the deal or take the money and run????

REF:
http://investorplace.com/2014/07/lorilla...-lo-stock/

http://seekingalpha.com/article/2315775-...y-be-final

http://seekingalpha.com/article/2315975-...ted-merger

http://seekingalpha.com/article/2316305-...-investors
There are people who use up their entire lives making money so they can enjoy the lives they have entirely used up
Frederick Buechner
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#2
I'm still not clear on the logic of the deal other than a larger RAI to compete with MO/PM.

As I said elsewhere, the blu line will be sold to Imperial whilst RAI's new, untested in the market e-cig will be retained. The only big asset I see is RAI becoming a major force in the menthol market. With zealots looking to control everything you do in your life, that isn't the most promising thing looking forward.

For me, I'm going to wait and see if the price will come back a little closer to the buyout price and then sell. Where will I put the money? I'm still not settled on that yet. I'm finding no big benefit for the investor/owner in the situation.
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“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#3
With the huge drop in price for LO after the merger was announced, that made up my mind to sit and wait. Though getting a 10% discount might make me buy some more LO and wait for the increase in the stock price to the merger price.
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#4
Ok, I've done a little more research on the deal. LO shareholders will receive $55.50 in cash and 0.2909 shares of RAI for each share of LO. Since I'm not interested in owning RAI, I think I'll sell soon and move on. The low cash part of the deal may hinder much more recovery in price if many people have the same opinion of RAI that I do.

I bought LO because they had a niche with the menthol market and blu e-cigs. It differentiated them from MO and RAI.
=====

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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#5
(07-19-2014, 11:12 PM)Dividend Watcher Wrote: LO shareholders will receive $55.50 in cash and 0.2909 shares of RAI for each share of LO

I believe it's actually $50.5 in cash. SA Article
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#6
rapidacid, thanks for the correction. Yes, brain-finger disfunction.
=====

“While the dividend itself is merely a rearrangement of equity, over time it's more like owning an apple tree. The tree grows the apples back again and again and again, and the theoretical value of the tree doesn't change just because of when the apples are about to fall.” - earthtodan


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