Vector Group's (VGR) Board Approves Spin-Off of Douglas Elliman Inc

Vector Group Ltd. (NYSE: VGR) today announced that its board of directors (the “Board”) has approved the spin-off of Douglas Elliman Inc. (“Douglas Elliman”), which is expected to be completed in late-December.

Upon completion of the spin-off, Vector Group will operate the tobacco segment of its business, which includes the manufacture and sale of cigarettes in the United States through Vector Group’s subsidiaries Liggett Group LLC and Vector Tobacco Inc., while also continuing to own interests in numerous properties and real estate projects across the United States. Douglas Elliman will own and operate the real estate services and property technology (“PropTech”) investment business currently owned and operated by Vector Group through its subsidiary New Valley, LLC, and will be capitalized with approximately $200 million in net cash and cash equivalents.

“The Board’s approval of the spin-off paves the way for us to establish Douglas Elliman as an independent publicly traded company in the coming weeks,” said Howard M. Lorber, President & Chief Executive Officer of Vector Group and Chairman, President & Chief Executive Officer of Douglas Elliman. “We are confident this separation is in the best interests of Vector Group, Douglas Elliman, our stockholders, and all our stakeholders. As a standalone company, Douglas Elliman will have a dedicated management team and Board, direct access to the public markets, and additional resources to capitalize on opportunities in the large and growing U.S. residential real estate market.”

The distribution is expected to take place on December 29, 2021 to holders of Vector Group common stock (including Vector Group common stock underlying outstanding Vector Group stock option awards and restricted stock awards) of record as of the close of business on December 20, 2021, the record date for the distribution. Each Vector Group common stockholder will receive one share of Douglas Elliman common stock for every two shares of Vector Group common stock held as of the record date.

No action or payment is required by Vector Group stockholders to receive shares of Douglas Elliman. For Vector Group stockholders who hold Vector Group common stock in registered form and for holders of outstanding Vector Group stock option awards and restricted stock awards as of the record date, in most cases the transfer and distribution agent will credit their shares of Douglas Elliman common stock to their book entry accounts. For stockholders who own Vector Group common stock through a broker or other nominee, their accounts will be credited with the new Douglas Elliman shares by the broker or other nominee. A prospectus containing details regarding the distribution of the new Douglas Elliman common stock and the Douglas Elliman business and management following the spin-off will be made available to Vector Group stockholders as of the record date prior to the distribution date.

For a period of time to be determined prior to the distribution, the new Douglas Elliman common stock is expected to trade on a “when-issued” basis on the NYSE under the symbol “DOUG WI” and Vector Group expects that its common stock will trade in two markets on the NYSE: in the “regular way” market under the symbol “VGR” and in the “ex-distribution” market under the symbol “VGR WI”. The dates for “when issued” and “ex-distribution” are expected to be released prior to the December 20, 2021 record date. Investors are encouraged to consult with their financial advisors regarding the specific implications of buying or selling Vector Group common stock on or before the distribution date.

The distribution is expected to qualify as a tax-free distribution for U.S. federal income tax purposes. Vector Group encourages stockholders to consult with their tax advisors with respect to U.S. federal, state, local and foreign tax consequences of the spin-off. Completion of the spin-off is subject to various conditions, including receipt of a tax opinion from counsel and the effectiveness of Douglas Elliman’s registration statement on Form S-1. Jefferies LLC serves as financial advisor to Vector Group and Sullivan & Cromwell LLP serves as legal counsel to Vector Group and Douglas Elliman.

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