Nestle SA, the world's largest food company, is considering a cash bid for Nabisco Holdings Corp., the sixth company to show interest in the maker of Oreo cookies, a person familiar with the situation said.
Nabisco Holdings, the sole asset of Nabisco Group Holdings Corp., was put on the block in April after financier Carl Icahn said he'd increase his stake in the company and press for its sale. Analysts and investors estimate the subsidiary could fetch at least $55 a share, or $14.6 billion.
Philip Morris Cos., H.J. Heinz Co., Groupe Danone SA, Cadbury Schweppes Plc and Icahn also are interested in bidding for the unit, which makes A-1 steak sauce and Ritz crackers, the person familiar with the transaction said. Some of the bidders may have formed teams, including Danone and Cadbury, investors said.
"The bidding is fast and furious because this is a very valuable asset,'' said Timothy Ghriskey, senior portfolio manager at Dreyfus Corp., which owns shares in Nabisco Group and Nabisco Holdings. "This goes for a minimum of $55 a share and we see a possible bid as high as $65.'' At $65 a share, Nabisco Holdings would sell for about $17.2 billion. The biggest U.S. cookie and cracker company also makes Ritz crackers, LifeSavers candies and Planters nuts.
Nestle spokesman Francois Perroud, reached in Switzerland, declined to comment. Nabisco Group declined to comment.
For Nestle - the maker of Nescafe coffee, Crunch chocolate bars, Quik drink mixes and Stouffer frozen entrees - a purchase of Nabisco Holdings would give Switzerland-based Nestle a sales boost in its U.S. grocery business and add a stable of snacks that it could sell through alternate venues such as vending machines, analysts said. Reuters
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