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Icahn raises Nabisco bid
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April 4, 2000: 5:06 p.m. ET
Billionaire offers $16 per share, or $5.2B, to acquire the company outright
By Staff Writer Tom Johnson
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NEW YORK (CNNfn) - Billionaire investor Carl Icahn offered Tuesday to purchase Nabisco Group Holdings Inc. outright in a "friendly" deal worth nearly $5.22 billion, increasing his pressure on the company's board, which just Monday spurned his previous partial takeover attempt.
In a letter to the company's board, Icahn offered to pay $16 per share in cash for the troubled parent company of cookie and cracker king Nabisco.
That represents a nearly 30 percent premium over the company's closing price of 12-3/8 Monday. Nabisco (NGH: Research, Estimates) shares closed Tuesday at 14, up 1-5/8, and are now up 60 percent since Icahn first announced his intention to replace Nabisco's board with his own slate and begin shopping the company.
""From my point of view, the company should be sold and it should be sold soon," Icahn said in an interview with CNNfn.com.
 Just last week, Icahn offered to purchase 100 million Nabisco shares, or a nearly 30 percent stake in the company, for $13 per share. Company officials turned down his offer Monday, calling the price "inadequate" and "not in the best interest of company shareholders."
Nabisco, the maker of Oreo cookies, Ritz crackers and Planters peanuts, subsequently hired New York investment banks Warburg Dillon Read and Morgan Stanley Dean Witter to explore its strategic alternatives, including the possible sale of the company.
Icahn said he was pleased to hear the company was directing management to try and maximize shareholder value, but said his offer was the best way to ensure the company wouldn't try and stall.
"I believe that they are maybe serious . . . but if they are just playing a game, then I'm there," he said. "If they are serious about selling the company, then they should give me due diligence."
A Nabisco spokesman was not immediately available for comment.
The waiting game
Unlike his previous offer, Icahn gave Nabisco's board no definitive deadline to respond to his offer, saying he would "wait a couple of days and if we don't hear from them, we'll give them a call."
Previously, Icahn has said if his takeover overtures were rejected, he would commence with a tender offer at the company's annual meeting next month.
In his letter, Icahn said he was baffled by the company's rejection given the company has traded recently as low at 8-1/4. However, he said he was comforted to hear the company was exploring a possible "friendly" merger before making a pitch of his own.
"I have been in contact with a large investment bank and with lending institutions and have been informed that on a 'friendly' basis, there should be no problem in facilitating the acquisition of [Nabisco], especially in light of the large amount of capital my companies would contribute to the transaction," he wrote.
Analysts have previously valued Nabisco at closer to $20 per share, although the company's stock has remained under pressure for several months now, burdened by a inhospitable environment for food industry stocks and lingering concerns about the company's exposure to tobacco litigation filed against Nabisco's former parent company, RJR Nabisco.
In its statement Monday, Nabisco's board accused Icahn of trying to take advantage of the uncertainty regarding the current tobacco litigation, which has had a negative impact on Nabisco Group Holdings' stock price."
But Icahn said his sole purpose was to ensure selling the company for top value remained high on the company's agenda.
Icahn said he would not require Nabisco stop soliciting other offers while he completed his due diligence or impose a break-up fee if a better offer is found.
"If you are not willing to go forward with me and do not officially put the company up for sale now, stockholders can only conclude that your press release was simply designed to give them false hopes and prevent your losing a proxy contest," he wrote. 
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Nabisco Holdings Group
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