Tisch Counters `Lousy' Drilling Market by Buying Loews Stock

  • Diamond Offshore Drilling shares have fallen 40% this year
  • Loews CEO Tisch says unequivocal yes that drilling to rebound

Loews Corp. Chief Executive Officer James Tisch said investors are ignoring the strength of publicly traded units like Diamond Offshore Drilling Inc., Boardwalk Pipeline Partners LP and insurer CNA Financial Corp., and he’s responding by repurchasing shares of his holding company.

“Rather than complain, we look at this as an opportunity to create value” through buybacks, Tisch said Monday in a conference call discussing third-quarter results. “When we purchased Loews shares, we were simultaneously buying all of our subsidiaries’ shares at a conglomerate discount.”

Loews bought back 12 million shares of its stock in the four months through October, about 58 percent more than in the first half of the year, according to a statement Monday. Tisch reiterated his confidence in the rebound of Diamond Offshore, which has been pressured by lower oil prices and what he called a “lousy” environment in the industry.

‘Unequivocal Yes’

“Since the start of this down cycle, I’ve been asked, ‘Is offshore drilling coming back?’ My answer is an unequivocal yes,” Tisch said in the call. “The lack of drilling now will sow the seeds for an oil price recovery later. When prices rise, which they will, Diamond’s customers will return to exploring for new sources of production.”

Diamond Offshore, which is majority owned by New York-based Loews, rallied 11 percent to $22.10. That’s still 40 percent less than the price at the end of December. Loews climbed 3.1 percent, narrowing its loss for the year to 11 percent.

CNA rose 22 cents to $36.78. The Chicago based insurer said third-quarter net-income fell 16 percent on investment losses.

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