Borden Seems Close to Buyout for RJR Stock : Acquisition: Deal with Kohlberg Kravis Roberts is proceeding on track, spokeswoman says.

Borden Inc. directors, turning aside a last-minute bid from investor Paul B. Kazarian, appeared close Thursday to a deal for Kohlberg Kravis Roberts & Co. to acquire the food and consumer products company for $2 billion in RJR Nabisco stock.

KKR, the New York-based buyout specialist, had set a deadline of Friday for an agreement. KKR spokeswoman Ruth Pachman said Thursday, “It’s proceeding on track.”

A potential stumbling block to the deal emerged Wednesday, when Kazarian came up with a plan to buy up to 90% of Borden’s stock.

Japonica Partners, Kazarian’s investment firm, said in a letter to Borden Chairman Frank J. Tasco it was interested in a “significant transaction with Borden or its shareholders” to provide greater value than would be available under the KKR offer.

The Kazarian proposal, which calls for Japonica to pay $16 to $18 a share for Borden stock, comes to $2.28 billion if the higher price were used to buy 90% of Borden’s 141 million shares outstanding.

KKR has offered to swap RJR Nabisco Holdings Corp. stock worth $14.25 for each share of Borden stock.

But a source close to the negotiations said Thursday the Japonica letter fell far short of a credible offer.

In a two-hour meeting with three top Borden officials Wednesday night in New York, Kazarian refused to elaborate on financing options or the structure of the deal, said the source, speaking on condition of anonymity.

“He said the letter speaks for itself,” the source said of Kazarian. “But there’s no proposal or offer in this letter.”

Kazarian has a different view of the meeting, said spokesman Richard Nicolazzo.

“He’s extremely disappointed that Borden’s board was not willing to engage in constructive dialogue,” Nicolazzo said. Japonica outlined its complaints in a letter to the board Thursday.

Japonica was not in a position to offer more answers, because Borden has refused to provide detailed information about the company’s operations, he said. What was offered was a menu of options, he added.

Kazarian’s proposal, according to sources close to the negotiation, offers various transaction possibilities, including an equity infusion of $200 million to $500 million for a corresponding stake in Borden.

The KKR deal would allow the buyout firm to unload some of its shares in RJR Nabisco, which KKR took private in 1989 for $24.53 billion and then returned to partial public ownership two years later.