Nabisco Financials Show Stability as United Biscuit, Icahn Deals Loom
As the Parsippany, NJ, parents of Nabisco's bakery-related operations prepare to acquire United Biscuits—and/or brace to be acquired by Carl Icahn and company, the company's sales, not just earnings, remain positive.
Today, Nabisco Group Holdings Corp. (NYSE:NGH) and Nabisco Holdings Corp. (NYSE:NA) announced financial results for the first quarter ended March 31, 2000. Nabisco worldwide net sales for the quarter increased 12% to $2.07 billion from $1.85 billion in last year's first quarter.
U.S. Biscuit operations increased in sales, earnings, market share and margins. Sales were $881 million, up 2% over a year ago. He company credited high levels of marketing support behind the company's core cookie and cracker brands. (See related article). The company also cited new products including Cafe Cremes cookies, Sportz cheese crackers, and several familiar Nabisco cookie and cracker items in new stand-up re-sealable bags.
Offsetting some of these gains were several discontinued breakfast bar and snack items.
For parent holding company NGH, net income for the quarter was $45 million, and for NA, net income was up $60 million, from the same period last year (excluding "special items" and discontinued operations).
On United Biscuits
Kilts Nabisco President and CEO James M. Kilts said, "Each of our three operating units moves into the balance of the year with good strength and momentum." During the quarter Nabisco reached a tentative agreement with several financial partners to acquire United Biscuits, the fourth largest global biscuit company. (See related article.)
"As the strategic shareholder in the consortium, Nabisco is well positioned to help direct future growth of this important UK-based biscuit marketer," Kilts said. Nabisco also expects to take full ownership of United Biscuits' high growth snacking businesses in China, Taiwan and Hong Kong.
Icahn Acquisition of Nabisco Still in Limbo
At the same time, Nabisco itself may be acquired by financier Carl Icahn and a group of other financial backers.
Last week, Icahn announced entering into a confidentiality agreement with Nabisco Group Holdings Corp. and hired the Industrial Bank of Japan to begin examining Nabisco Group's financial records. The agreement is part of a bidding process Nabisco Group established after Icahn indicated he was considering a takeover offer.
Under the terms of the latest publicly announced agreement, Icahn and his affiliates are not permitted to solicit proxies from NGH stockholders, or to purchase additional NGH shares, until the earlier of July 15, 2000 or the time that NGH enters into an agreement with another purchaser. As a result, Icahn will not proceed with the proposed proxy solicitation or tender offer previously announced.
Icahn already owns more than 31 million of Nabisco Group's 326 million shares, and in the first week of April, increased his offer to $16 a share for the rest. (See related article).
More details from Nabisco's Q1 2000 financial statement can be found by searching the editorial archive.
Edited by Bob Sperber and Pam Ahlberg, Managing Editor, Food Online.