Consumer stocks were ending moderately lower Wednesday with
shares of consumer staples companies in the S&P 500 about
falling about 0.1%. Shares of consumer discretionary firms in the
S&P 500 were down 0.4%.
In company news, shares of Lorillard Inc. (
) declined Wednesday, falling for a second day following an 8% gain
earlier this month amid speculation Reynolds American (
) may be positioning itself for buyout of the rival
The Financial Times last week reported RAI had hired Lazard to
assist with a potential LO buyout, suggesting a $20 billion
pricetag was possible. But analysts at Citigroup earlier this week
threw some cold water on that speculation, saying a deal was
unlikely because of prospective anti-trust concerns.
Wells Fargo Securities analyst Bonnie Herzog suggests RA could
eventually offer as much as $80 a share offer, provided they are
able to find sufficient cost-savings in the combined companies.
She sees synergies could generate around $400 million in cost
savings - equal to 8% of LO revenue - adding they would likely
close either LO's or RA's manufacturing facility following a deal,
"which makes sense given we expect cigarette volume declines to
accelerate as e-cigs continue to displace volume," Herzog
LO shares were down 2.3% at $50.99 each in late trade while RAI
was holding on to a 1 cent advance to $53.70 a share.
In other sector news,
(+) DMND, Q2 earnings of $0.09 per share, ex items, beats by
$0.01. Revenue falls 0.1% year over year to $220.6 mln, topping
Street view by around $3.93 mln.
(-) CZR, Q4 net loss widens from year-ago levels to $12.83 per
share, trailing analyst forecasts for a $1.59 per share loss.
Revenue rises 3.5% to $2.08 bln, also lagging Street view by around