Loews Corporation (NYSE:LTR) has approved a plan to spin off its entire ownership interest in Lorillard, Inc. to holders of its Carolina Group (NYSE: CG) stock and Loews common stock in a tax free transaction. The deal is expected to close in mid-2008.  Lorillard, presently a wholly owned subsidiary of Loews, would become a separate publicly traded company on the New York Stock Exchange.

The Lorillard shares distributed in the redemption of the Carolina Group stock would constitute approximately 62% of Lorillard’s outstanding common stock.  Loews would effect a redemption of all of the outstanding Carolina Group stock in exchange for shares of common stock of Lorillard, in accordance with the terms of the Carolina Group stock contained in the Restated Certificate of Incorporation of Loews. Holders of Carolina Group stock would receive one share of common stock of Lorillard for each share of Carolina Group stock they own.

Loews would dispose of the remaining 38% of Lorillard’s outstanding common stock in an exchange offer for shares of outstanding Loews common stock if Loews determines that market conditions are acceptable for an exchange. If Loews determines not to effect the exchange offer or the exchange offer is not fully subscribed, the remaining shares of Lorillard would be distributed as a pro rata dividend to the holders of Loews common stock. 

Loews currently has two classes of common stock outstanding:

• Carolina Group stock, which is intended to reflect the economic performance of a group of assets and liabilities called the Carolina Group, principally consisting of Lorillard and its subsidiaries; and
• Loews common stock, representing the economic performance of the remaining assets of Loews, including the interest in the Carolina Group not represented by outstanding Carolina Group stock.

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Loews Corp. (LTR) is seeing its shares indicated down almost 6% around $44.00 pre-market, its 52-week trading range is $40.21 to $53.46. 

Jon C. Ogg
December 17, 2007

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