Vector Group Ltd . (NYSE:VGR), a company known for its cigarette manufacturing, announced the completion of its acquisition by JTI (US) Holding Inc. on Monday. This move has led to the delisting of Vector Group's shares from the New York Stock Exchange (NYSE) as the company becomes a wholly owned subsidiary of JTI (US) Holding Inc.
The acquisition process began with a tender offer on September 4, 2024, where JTI (US) Holding Inc.'s subsidiary, Vapor Merger Sub Inc., offered to purchase all outstanding shares of Vector Group at $15.00 per share in cash. By the offer's expiration on October 4, 2024, approximately 68.67% of Vector Group's shares had been tendered.
Following the successful tender offer, the merger was completed on Monday, transforming Vector Group into a privately held entity and triggering the delisting process. The NYSE has filed a Form 25 with the SEC to formally delist Vector Group's shares, and the company will also file a Form 15 to deregister its shares under the Exchange Act and suspend its reporting obligations.
As a result of the merger, all outstanding Vector Group shares not already purchased in the tender offer have been converted into the right to receive the same $15.00 cash consideration per share, with certain adjustments as outlined in the merger agreement.
The acquisition and subsequent delisting represent a significant change for Vector Group's shareholders, who will no longer hold publicly traded shares in the company. The total consideration for the acquisition is approximately $3.4 billion, excluding transaction fees and expenses.
In connection with the acquisition, several executive and director-level changes have occurred. The company's board of directors amended the Supplemental Retirement Plan to accelerate benefits for CFO J. Bryant Kirkland III. Employment agreements for certain executives were also amended, and a retention agreement was entered into with Nicholas P. Anson, President and COO of Liggett Vector Brands LLC.
This transaction marks a change in control for Vector Group, as it now operates as a subsidiary of JTI (US) Holding Inc. The company's certificate of incorporation and by-laws have been amended and restated as part of the merger process.
The information in this article is based on a press release statement from Vector Group Ltd. and reflects the key facts and implications of the acquisition and delisting event for investors and stakeholders.
In other recent news, Vector Group Ltd. reported a modest increase in revenues to $371.9 million in its second-quarter financial report of 2024, a rise from the $365.7 million reported in the same quarter of the previous year. The company's net income also saw a substantial increase to $54.2 million, up from $38.1 million. The tobacco segment, led by Liggett Vector Brands, was a notable performer with a 10.5% increase in adjusted operating income.
In the recent annual meeting of Vector Group Ltd., stockholders cast their votes on several key proposals. The election of directors resulted in all nominated directors being reelected to the board. An advisory "say on pay" vote regarding executive compensation indicated a significant portion of shareholders expressed discontent with the pay structure for named executive officers.
Shareholders showed strong support for ratifying Deloitte & Touche LLP as the company's independent registered public accounting firm for the year ending December 31, 2024. However, a proposal suggesting amending the company's governing documents to require an independent director as the Chairman of the Board received less support.
These recent developments reflect shareholder perspectives on the direction of the company and its governance.
InvestingPro Insights
Vector Group Ltd.'s (NYSE:VGR) recent acquisition by JTI (US) Holding Inc. marks a significant milestone for the company, and InvestingPro data provides additional context to this development.
Prior to the acquisition, Vector Group demonstrated strong financial performance. The company's P/E ratio of 11.8 indicated that it was trading at a relatively low earnings multiple, which may have made it an attractive acquisition target. This is further supported by an InvestingPro Tip highlighting that VGR was "Trading at a low P/E ratio relative to near-term earnings growth."
The company's financial health was also evident in its revenue growth. InvestingPro data shows that Vector Group's revenue grew by 2.45% over the last twelve months as of Q2 2024, reaching $952.97 million. This growth trend aligns with the company's reported increase in second-quarter revenues mentioned in the article.
Another notable aspect is Vector Group's dividend policy. An InvestingPro Tip points out that the company "Pays a significant dividend to shareholders" and "Has maintained dividend payments for 30 consecutive years." The dividend yield of 5.34% as of the latest data underscores the company's commitment to returning value to shareholders, which may have been a factor in the acquisition decision.
The acquisition price of $15.00 per share appears to be in line with the company's fair value estimates. InvestingPro data shows an analyst fair value target of $16.00 and an InvestingPro Fair Value of $17.41, suggesting that the acquisition price was within a reasonable range.
For investors interested in a deeper analysis, InvestingPro offers 10 additional tips for Vector Group, providing a more comprehensive view of the company's financial position and market performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.