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IN BRIEF / TOBACCO

Tracking Stock Okd for Lorillard Unit

January 05, 2002|Bloomberg News

Shareholders of Loews Corp., the conglomerate controlled by Laurence Tisch, approved the creation of a class of stock tied to the value of the company's Lorillard Tobacco Co. unit.

The tracking stock won approval over the opposition of some Loews shareholders such as the California Public Employees' Retirement System, the State of Connecticut Trust and the Hotel Employees & Restaurant Employees International Union.

The opponents said they wanted Loews to spin off the company. Executives hadn't explained why a tracking stock would be better for shareholders than a spinoff, they said.

"The reason Loews wants to issue a tracking stock instead of spinning off Lorillard is that Lorillard provides sizable cash flow for Loews," James Tisch, Loews' chief executive and son of Co-Chairman Laurence Tisch, told shareholders at the Regency Hotel in New York.

Loews uses the cash to invest in its oil-tanker and CNA Financial Corp. insurance business, Tisch said.

Loews also has interests in hotels and owns watch maker Bulova Corp.

The timing of the sale and other details weren't disclosed. Loews' shares rose $1.63 to $56.28 on the New York Stock Exchange.

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Bloomberg News

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