Icahn Readies Offer for Nabisco Shares

Financier Carl Icahn, who has tried repeatedly to wrest control of Nabisco Group Holdings Corp. in recent years, said Thursday that he plans to buy a $1.3-billion stake in the company and push for its sale.

Icahn said he is prepared to offer $13 each for 100 million shares of the company, whose main asset is an 80.5% stake in Nabisco Holdings Corp., maker of Oreo cookies, Ritz crackers and Life Savers candies.

Icahn has waged four proxy fights since 1995 to try to force the company to totally split its food and cigarette businesses, arguing that smoking-related lawsuits have hurt its shares. Icahn said he is trying to unlock the value of Nabisco Group’s stock, which has fallen by half since June.

Nabisco Group shares rose $2.44 to close at $11.75 on the New York Stock Exchange. Nabisco Holdings jumped $4 to close at $31.31, also on the NYSE.

Parsippany, N.J.-based Nabisco Group urged shareholders to take no action while the board reviews the offer.

Icahn, best known for his buyout of Trans World Airlines, said a successful tender offer would give him 40% of Nabisco Group. He now holds about 31 million shares and is the company’s largest noninstitutional shareholder.

Two weeks ago, Icahn said he would seek the election of nine directors to Nabisco Group’s board. A bigger ownership stake would help him elect his slate.

“If the tobacco litigation gets worse, it would be much harder to sell Nabisco a year from now,” Icahn said in an interview. “Shareholders should be given the right to choose to sell it now and get a large premium.”

Icahn said he will begin his tender offer Tuesday if Nabisco Group drops its new “poison pill” defense against buyouts, approves his stock purchase and moves back the May 9 date of the annual meeting so he can vote his shares.

He said his board slate, if elected, would immediately consider the sale of Nabisco Group.