Tobacco Documents Online

. `trolling interest'~ in Gallaher Ltd:, Grtat Brit- Anzerzcan T obacco, Russ T o as End Talks ain's second largest tobacco company, making b American the biggest U S. cigaret concern in ~ terms of sales. R. J. Reynolds Tobacco Co. had On 1~Ylerger; Firms CouZdn t Agree on Terms been the largest. Tobacco companfes have been diversifying .. ~ By a WALL STREET JOURNAL Staff HeporterNEW YORK-American Tobacco Co. and Russ Togs Inc. announced. termination of merger negotiations, marking the second timee the large cigaret concern had failed to acquire an apparel company. Robert B. Walker, president' and chairman of American Tobacco~ and Eli L. Rousso, presi- dent of Russ Togs, said they "can't reach an agreement on terms and conditions, and ac- eordingly negotiations with respect to the pro- posed acquisituon . . . have been terminated by mutual consent." Neither company would elaborate. Under pre.^iouslyannouneed merger terms, public holders of Russ Togs' 3.8' million shares' outstanding would have been given an option to receive either $50 a share in cash or the "ap- I proximate equivalent"' in a new convertible" preferred stock. Russ Togs' • management, which owns about 30ro of the stock outstanding, would have been given the equivalent of $45 of convertible preferre& for each common share,, plus deferred payment, of $5 of the same stock, depending oni Russ Togs' earnings over a three-year period. . Total value of the offer was put at'~ about I$190 million, Last year, merger talks between American Tobacco and Kayser-Roth Corp., another large apparel maker, were broken off. Penn Central has since agreed to acquire Kayser-Roth. Asked' if American Tobacco still is interest. I ed in acquiring clothing companies, a spokes- man said the two merger attempts "would in- dicate that." The spokesman, Richard $. Stinnette, assist tant to the president, disclosed that' American 'Tobacco had received about 77/o of the out- standing stock of Duffy-Mott Co., a food pro- cessor, in a recent tender offer. American Tobacco previously had an- nounced it received 72% of Duffy-Mott stock in its first offer, but hadn't announce.d results of its extended offer. In trading on the New York Stock Exchange ~ Friday, American Tobacco closed at $34, down 112% cents for the day. Russ Togs closed at $40.125, down $4:125. American Tobacco recently ac"quired con- THE WALL STREET JOURNAL, Monday, September 9, 1968 linto nontobacco products and overseas cigaret operations since 1964, when the Surgeon Gener- al's Advisory Committee issued its report on smoking and health: Last week, one of the six major U.S. cigaret companies-Lorillard Corp. -agreed to be acquired by Loew's Theatres Inc. Asked if Russ Togs is stilll open for merger offers, Mr. Rousso said, "We intend to attend to our business for the present." I EarltEr this year, Mr. Rousso had talked of acquiring other companies and said Russ Togs will' expand from primarily a maker oL women's apparel to a diversified apparel com- pany. ctdtP a°ri>.t Unrb L-amps rlEtv YORK, N. Y. D. 3'.O,QJ5 =V. 1,494,704 AU c 2 8 1968 U.S, CONCERN WINS GALLAHERCONTROL American Tobacco's Offeri, SucceeKls in Britairt I `I `LONDON, Aug. 27 (UPI)-; The American Tobacco Cnm-; pany has secured control of; ~i,ltr :jInltrna[ x1f (r; IIiriittaLP NF1M Y(1RK. N,Y. D. 2s.~s1 New venture for B&W LOUISVILLE, kY. - T}le BrOwn, and A G_~ 1968 Williamson Tobacco Corporation has II 2 8 ~~ announced it is currently negotiatingg to acquire Vita Foods Products, Inc., -1 a I`ew York importer and packager of ConttOls UK Tobacco Fl Pa ONF specialty f'ood items. 'I1he venture would Am erican Tobacco Co: has secured con- 1)r B&Nc's fir;t nutside the tobacco fleld. trol of Gallaher Ltd. an&cne offi its biggest Aiigunt '1. 190' ~ps for approximately $27:5 million, purchase more than 99 per cent of Godfrey Fhill' F ilhps by Philip Morris to the Monopolies Commission, thus removing one possible ob- stacle to the American company's goal. Philip Morris made a bid on Aug 19 to competitors, FhihpMorrisHtc. made prog- ress in its bi ' or con ro o another British -TO$ACr0~11 tobacco firmj Godfrey Phillips Ltd6 The British Board of Trade said it will not refer the proposed purchase of, Godfrey h' ,6614a_~r64 e Gallaher, Ltd., and one ofiAmerican's biggest competi-;' tors, Philip Morris. Inc., has' made progress in its bid forl Icontrol of another Britishl tobacco company, Godfrey' Phillips, Ltd. 1 The British Board of Trade'I said today it would not refer. ' the proposed purchase of God- frey Phillips to the Monopolies Commission„ thus removing bne possible obstacle to Philip r !Morris's goal. r~ - phili`~n m-ri; made a bid oni Aug. 19 to purchase more thanli ~ 99 per cent of Godfrrey Phillips; ~ for approximately $27:5-mil- ~ lion. I ' In accordance with the terms ~ of its offer to purchase 27,- N' 325,000 Gallaher shares, Amer- Ican Tobacco .said . it would ~ purchase about 63 per cent' of j the shares forwarded by each NPJ~~tockholder. American . had sou ht enou h hares t i ~~~......,,, g g ve s o g 1~ it a 50 per cent interest. I n %