Icahn battles for RJR

October 25, 1996: 8:53 p.m. ET

Billionaire ups his stake in company, continues call for food spin-off
From Correspondent Katharine Barrett

NEW YORK (CNNfn) - Corporate raider Carl Icahn is once again nipping at the heels of tobacco and food giant RJR Nabisco Holdings Corp.
     The billionaire said Friday he has upped his stake in the company to 7.3 percent. He is also continuing to push his agenda with renewed vigor.
     Icahn's latest move isn't unexpected. After he and investment partner Bennett LeBow lost their proxy battle for RJR last spring, Icahn vowed to continue the fight.
     He has invested another $108 million in the company, despite the fact that RJR's stock is now worth less than when he bought most of his shares.
     Tobacco analyst Martin Feldman of Smith Barney said Icahn's latest move is uncharacteristic.
     "He's lost a lot of money in his initial investment. I think he's really acting as someone who is desperate. I don't think the long-term institutional investors in the stock market are desperate. I think they'd be happy to support Steve Goldstone, the existing chief executive," he said.
     Icahn wants RJR to fire Goldstone. He also wants the company to raise the dividend, settle the tobacco lawsuits and spin-off Nabisco Foods.
     Many tobacco analysts doubt Icahn will succeed. Tobacco analyst Mark Cohen said Wall Street is generally supportive of the company's management. (156K WAV) or (156K AIFF)
     Wall Street was also buzzing Friday about Icahn's short-lived hiring of top tobacco analyst Gary Black, who he wanted to run for a seat on RJR's board.
     Black backed out on Icahn, but the reported partnership may have hurt Black's credibility. Now Icahn is scrambling to offer shareholders a board team, which he must assemble by Nov. 5.