Financier Icahn Raises Bid for Rest of Nabisco to $8.3 Billion

Financier Carl Icahn raised his offer for Nabisco Group Holdings and said late Thursday that he could increase it even more.

But the bids reportedly made by Philip Morris Cos. and a venture of France’s Danone and Britain’s Cadbury Schweppes for food maker Nabisco Holdings disappointed Wall Street. Nabisco Holdings, which makes Ritz crackers, Oreo cookies and LifeSavers candy, is 80.6% owned by Nabisco Group.

The Nabisco Group board is expected to meet today to review the bids for the parent company and for its stake in Nabisco Holdings.

Although some industry analysts expected a quick decision, others believed that the auction process could be extended for weeks in hopes of getting higher offers.

In trading Thursday on the New York Stock Exchange, Nabisco Group fell 6 cents to close at $25, and Nabisco Holdings lost $1.69 to close at $51.56.

Icahn, the biggest individual shareholder in Nabisco Group at 9.6%, disclosed early Thursday in a federal filing that he had increased his offer for the rest of the company to $28 a share, or $8.3 billion. That bid consists of $19 in cash and a two-year note with a face value of $9 for each share.

Icahn earlier offered $22 a share, consisting of $19 in cash and a two-year note with a face value of $3.

According to a filing later Thursday with the Securities and Exchange Commission, Icahn disclosed that he had informed Nabisco he could offer as much as $31 a share by boosting the face amount of the two-year note to $12. He said he could raise the extra money by arranging to “pre-sell portions of the business of Nabisco” to other potential buyers.

Icahn, who had made three failed efforts to replace the Nabisco Group board during the last few years, goaded the board to put Nabisco Group on the market when he suggested in late March that he wanted to increase his stake in the company to 40% through a $13-a-share offer.

The Wall Street Journal reported Thursday that Philip Morris, the owner of Kraft Foods, had bid less than $55 a share for all of Nabisco Holdings, and that the Danone-Cadbury venture was preparing a bid of about $50 a share.

Some analysts had been expecting that Nabisco Holdings would sell for more than $60 a share.

Spokesmen for Philip Morris and Cadbury declined to comment on the report, and a call to Danone was not returned.