Tobacco Documents Online

., •.. r. C 196b'Pfle New York Times Qompanr. NEW YORK, FRIDAY, SEPTEMBER 6, 1968 iE1N's 0 MAKESBID! L ~ TO B1JY I0R11AARD Stockholder Vote Is Needed In Share Exchange That Exceeds $400-Million By LEONARD SLOANE I Loew's Theatres„ Inc.,, an- `nounced plans yesterday to ac- ;quire the Lorillard'Corporation; !a major cigarette maker, in a dramatic move reflecting the nationwide trend toward the formation of wide-ranging cor- porate giants formed through 1the merger of unrelated busi+ nesses. The S¢QO••million-plus actfron, it ~agprp44 by the directofd and stodijiolders of both coirr panies, would create a corpora- tion with sales close to $750- million and offering a wide ~ variety of goods and services to the consumer-from' cigarettes and pet, f.ood to hoteI rooms and motion-pictures. : . Within the last decade, a new breed of multidivision com• panies, which Wal,t Street calls conglomerates, has pmLiferated on the industrial scene. Dy its projected merger with Lorillard, Loew's would be in a position to join such companies as Lit- ton Industries, Inc.; Gulf and Western Industries and Ling- Temco-Vought as a leading force in this tzendi "This company Is going to go forward as a consumer-products company," said Laurence A. ITi'seh, chairman of Loew's, a theater-ehain that began a diversification drive several i years ago by venturing into the hotel field, where it is now a major operator. In addition to Its coast-to-Il ,Continued on Page 59, Column 2 i ; Loew's Makes Bid to Acquire Lorillard ,'Conttnued From Page 1, Col. 2 icoast network of theaters, ILoew's owns or operates hotels in the .United Statep . and the Garibbean and expects to open _ one. soon in: I:ondon. Lorillard'sj while Loew's bid for Commer- products include Kent, True,~ eial Credit Corporation early Newport and Old Gold ciga-'n 1968 was upset by Commer- rettes, rettes, Tabby and '17tree Little cial Credit's merger with the Kittens cat food and lteed's, Si'r, Control Data Corporation. Look, and Big Hunk candy. The Loew's - Lorillard deal The announcement of th4llwas arranged within a week, merger, which brings togethe : after Mr. Tisch learned' from two corporations well know;the investment banking firm to the consumer, took the fi= of Lazard Frt!res & Co. that nancial communit wher~llonllard might be amenable to y'- merger overtures Mr Tih 9 . ; c rumors are usually rife anci; and Manuel Yellhn Inc. Goldwyn-Mayer ch i , , a rman ~ stock-market action follows-+~ Lorillard, which~ until April f L']t d ld f' d y surprise. In the first two tock-trading days this week, 'Loew's shares fell a point on the New York Stock Exchange and advanced only % yester- day before the companies 3s- sued': their statementl It was a different story by the end of the day, however. Loew's cltised at 110~/z, up 15~/Z points, for the biggest advancelmally made, titt projected mer on the Big Board, while Loril-Iger was kept so much• unde lard gained 2% to close at~wraps that two public rela- 603/. tions officials at Loew's, who Security analysts at broker- were at a meeting in Atlantic age firms put their slide rules City, N. J., had to rush back to work yesterday afternoon to to New York when they determine the valUe of the learned what had happened. , transaction and came up with( Operates 1t18 Theaters a range of answers. While nol one doubted that' the stock' ~w's, which operates 108' market placed the value of theaters and 12 hotels and' Lorillard before the merger an~motels, earned $15.8-million on nouncement at about $390-mill a volume of 5136.8-millioa in lion-6.5 million shares times U'e year enaea Aug. si, i~i. lu b function. While it has not yet rePort ed. coat ai a c the last price of 60s ~-there were differing views on howon fiscal 1968 results, Wall, much Loew's was paying' Street is estimating that the I through the securities it -planscompany's volume amounted'to to issue to Lorillard stock=about 5180•million and that its holders. iearnings ro3e •to around 520- !million. This is exclusive of the Terms Are Given +profits from the sale of about Terms provide for each shar half~ of~ the Control Data stock of Lorillard to be exchanged forreceived in exchange for the a Loew's $62 principle amountaCommercial CrediU stock it had 25-year subordinated debentu paying 6T/8 per cent interes plus one•quarter of a warran to acquire one common shar Both Loew's and Lorillard arelMayer Pictures, which resulted' companies that sought other~in the creation of Loew's~ big mergers recently and wcrey~etro-Goldwyn-Mayer motion-1 spurned. Last year, Lorillard's , attempt to acquire Schenley In-~picture production organita-; dustries Inc fell throu h uon• , ., , g 0 or~ ar , are o r~en s. k ll and Lewis Gruber, Lorillard's honorary chairman, has been a member of the, Loew's board since 1960. •Within the last.few days, a series of meetings were held in Scarsdale, N. Y., where Mr. Tisch and Mr. Yellen live. Un- til the announcement was for-, purchased', prior to' its bid for controh In 1967, Lorillard earned~. 531- million on sales of $565-million, of Loew's for $110. Analyst 'both record figures for the estimate the price tag to Lori1f tobacco concern. lard stockholders at betweer Loew's and Lorillard both $66 and $75 a share. have colorful histories that are; This would make the trans a part of the folklore of their action worth between 5429-mil• respective industries.. 'lion and 5488-million.Loew's Theatres, originally Loew's - with sales arouni known as Loew's, Ine., takes one-third those -of Lorillar ~ts name from its founder, - also said that It woul Marcus Loew, a pioneer in the consider splitting its stock tw nickelodeon, era of the movies. for-one simultaneouslywith th The company started as a film merger. If this is aecomplished exhibitor in 1919 and moved Lorillard stockholders would re into production the following ceive one-half a warrant to bu year through.the acquisition of ~ a share of the new Loew' the Metro Pictures Corporation stock for $55. ~ In 1924, it bought the Gold- wyn Company and shortly afterward acquired Louis B. Following the institution of al Federal'~ antitrust suit againstl the major film companies,l Loew's-along with the other; giant production and exhibition firms-signed a consent judg- ment in 1952 to break up the two phases of its business. In 11954, the exhibiting arm was established as Loew's Theatres, Inc. and the producing-distribut- ing arm was set up as Metro- was nown as the P.Lori ard Company, was founded in 1760 by Pierre Lorillard, an 18-year- old French Immigrant. Mr. Lorillard began by making and Iselling snuff in New York City. i The snuff mill built 32 yearsi later by his sons Peter and I George still stands -in the Bronx Botanical Garden: One of the more unusual heads of Lorillard; was another descendant of the founder, Pierre Lorillard 4th. A sports• man, society leader and~ . race-l horse owner in the 19th cen- I tury, Mr. Lorillard established I, the Tuxedo Park Club in Orange County, N:Y., a favorite gathering place for the elite of that day. The word "tuxedo" is attributed to: Mr. Lorillard;, whose son was said to have (15)