Red-faced RJR raider retreats

Bennett LeBow, the US investor and corporate raider, yesterday staged an embarrassing 11th-hour climb-down in his six-month battle to split RJR Nabisco Holdings Corporation into separate food and tobacco businesses.

He was set to team up with fellow corporate raider Carl Icahn to launch a bitter proxy fight at today's RJR annual meeting. Mr LeBow said he called off his fight after failing to win enough votes to elect his board nominees.

His plan was to oust current RJR board members, replace them with people sympathetic to his and Mr Icahn's views and then spin off Nabisco, the food business.

That would have left RJR with the tobacco company RJ Reynolds, which he then wanted to merge with cigarette manufacturer Liggett Group, a subsidiary of his company Brooke Group, of which he is chairman.

But as RJR Nabisco braced itself for one of its most volatile shareholder meetings, Mr LeBow said yesterday. "Although this is disappointing, it comes as no surprise. We always knew we were facing an uphill battle."

The news is a big coup for RJR, which broke records in 1989 as the world's largest leveraged buyout when KKR took it over for $25bn.

Mr Icahn and Mr LeBow together control about 19 million shares, equal to about 7 per cent of RJR, making them the second-largest shareholders.

Both men are notorious for buying up strategic stakes in companies in a bid to force management to execute actions that benefit their own business objectives.

This time, however, neither seem to have any specific plans regarding RJR, apart from continuing to loudly voice their opinions. Mr LeBow attempted to redeem himself yesterday by arguing that his six-month fight with RJR forced the company to restore some shareholder rights and announce an increased dividend and a modest share repurchase programme. "It's no doubt that without the pressure we applied ... managers would not have gone that far," he said.

He said he would continue to demand that RJR spin off Nabisco now. "We still believe in a Nabisco spin-off and we are still convinced that it can and should be done," he said.

Last January RJR floated a 19.5 per cent stake in Nabisco. The move was structured to allow RJR to spin off the remaining Nabisco shares at a future date on a tax-free basis.

However, the RJR board will not consider a complete spin-off until 1997 or 1998.

Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
books...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Anna Woodward: German Speaking Accountant

£45,000: Anna Woodward: My client is aleading global manufacturer and service ...

Danielle Degan: Accounts Payable Executive

£13 - £15 Hourly Rate: Danielle Degan: Are you looking for a Purchase Ledger r...

Jemma Gent: International Management Accountant

£150 - £200 Day Rate: Jemma Gent: Are you as an experienced accountant with ex...

George Parlour: Assistant Accountant

£13 - £15 Hourly Rate: George Parlour: Do you want to give something back? Th...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower