Icahn, Nabisco Agree on Steps in Takeover Bid

Carl Icahn said Monday that he reached an agreement with Nabisco Group Holdings Corp. that will allow the financier to see the company’s books and solicit partners for his $4.7-billion takeover offer.

In return for the confidentiality agreement, Icahn agreed to drop his month-old proxy fight for Nabisco Group’s board. Icahn said he hired Industrial Bank of Japan to study an acquisition of the company, whose only asset is an 80.6% stake in cookie and cracker maker Nabisco Holdings Corp.

The financier said he will participate in a bidding process being led by Nabisco Group’s financial advisors, Warburg Dillon Read and Morgan Stanley Dean Witter. Icahn is trying for the fourth time in five years to win control of the company and its Nabisco Holdings unit, the maker of Oreo cookies, Ritz crackers and LifeSavers candies.

“While Icahn is involved in the process, investors believe the cage will be rattled more aggressively than without him,” said Salomon Smith Barney analyst Martin Feldman, who rates Nabisco Group “buy.”

Parsippany, N.J.-based Nabisco Group on Wednesday asked Icahn to work with its advisors, one day after he sweetened his offer to buy all of the company for $16 a share.

The company had rejected as inadequate Icahn’s earlier offer to buy 100 million shares for $13 each. Icahn is the company’s largest noninstitutional shareholder, with more than 31 million shares.

Icahn won’t be allowed to solicit proxies or buy additional shares until July 15 or when Nabisco Group reaches an agreement with another buyer. On March 13, Icahn said he would seek the election of nine directors to Nabisco Group’s board.

Icahn’s bid may spark offers for the company’s stake in Nabisco Holdings that could reach $60 a share, or $12.8 billion, analysts and investors said last week.

On the New York Stock Exchange, Nabisco Group shares fell 50 cents to close at $14.63, while Nabisco Holdings closed off 13 cents at $37.44.