PARSIPPANY, N.J. — Nabisco Group Holdings Corp. invited Carl Icahn to work with its financial advisors, a day after the financier sweetened his bid for the company to about $5.2 billion.
Nabisco Group hired Warburg Dillon Read and Morgan Stanley Dean Witter on Monday to help find ways to boost its stock, such as a sale of the company or its 80.6% stake in Nabisco Holdings Corp., the maker of Ritz crackers and Oreo cookies.
Chairman Steven Goldstone told Icahn in a letter released Wednesday that the company's board will consider "all bona fide proposals at the appropriate time." Icahn, best known for his buyout of Trans World Airlines, is trying for the fourth time in five years to gain control of the company.
"In the past, Goldstone has out of hand rejected Icahn's proposals," said Salomon Smith Barney analyst Martin Feldman, who rates the shares a "buy." "Management's invitation is a recognition that he may be able to bring value to the table."
Icahn wasn't immediately available for comment.
The financier Tuesday offered $16 a share for all of Nabisco Group, after the Parsippany, N.J., company rebuffed as inadequate his bid for a third of its stock at $13 a share. Icahn, Nabisco Group's largest noninstitutional holder with 31 million shares, last month nominated a slate of directors.
"We're telling our clients to wait for further developments," said Tom Burnett, founder of Merger Insight, which tracks mergers and acquisitions. "There's so much going on here that it changes from minute to minute."
Nabisco Group was formed in June, when RJR Nabisco Holdings Corp. spun off its cigarette unit as R.J. Reynolds Tobacco Holdings Inc. The company changed its name to Nabisco Group to reflect its stake in the food unit, which went public in 1995.
The aim of June's spinoff was to free the food company from the tobacco lawsuits and the threat of a big legal judgment.
Yet, since they began trading at $21.38 on June 15, the company's shares had lost more than half their value before Icahn's initial offer last week.
Nabisco Group is a defendant in about 40 tobacco-related lawsuits. Claims have been made in a Florida class-action suit, and plaintiffs could be awarded a settlement worth "billions of dollars," Nabisco Group said in a recent regulatory filing.
Analysts have cautioned that there may be some roadblocks in trying to sell the company, including passing along that tobacco-related liability or the possibility that Nabisco Group could lose the tax-free status of the R.J. Reynolds spinoff. That could cost the company about $2 billion to $3 billion.
On the New York Stock Exchange, Nabisco Group shares closed up 13 cents at $14.63, and Nabisco Holdings fell $1.56 to close at $37.44.