RJR NABISCO News Release
CONTACT: Jason Wright
(212) 258-5770
LEBOW & ICAHN VIOLATE SECURITIES LAW; SECRETLY CONSPIRE
TO GAIN CONTROL OF COMPANY, RJR NABISCO SUIT SAYS
NEW YORK, Nov. 20, 1995 - RJR Nabisco Holdings Corp. today filed suit against
financiers Bennett LeBow and Carl Icahn for violating securities law by
secretly conspiring to form a group to acquire a controlling interest in RJR
Nabisco common stock.
In a complaint filed today in the U.S. District Court for the
Middle District of North Carolina, RJR Nabisco said the two men's ultimate
objective was to deliver control of the company's tobacco subsidiary to them
and their partners and combine the tobacco business with a tobacco company
controlled by Mr. LeBow, Liggett Group, Inc.
A group led by Messrs. LeBow and Icahn has announced plans to
solicit consents from RJR Nabisco's shareholders to support an immediate
spin-off of the company's food business. The LeBow/Icahn group also said it
plans to field it own slate of candidates committed to an immediate spin-off
for election to RJR Nabisco's board.
In the complaint, RJR Nabisco said the two financiers:
". . . have violated Sections 14(a) and 10(b) of the Securities
Exchange Act of 1934 and Rules 14a-9 and 10b-5 thereunder, by means
of materially false or incomplete statements concerning the purpose
and background of the consent solicitation. Defendants have
repeatedly emphasized in their public statements that the sole
purpose of the consent solicitations is to promote a spin-off of
RJR's Nabisco food subsidiary to RJR's shareholders..."
After having been spurned by the company in the spring and
summer of 1995 in his repeated efforts to merge Liggett with RJR, "...LeBow
determined to seek control of RJR's tobacco business surreptitiously and
coercively," the complaint says. "LeBow devised a covert plan to acquire
through open-market purchases, directly and through others acting with him, a
"control" block of RJR common stock without paying any premium thereon. LeBow
then would force a merger of RJR's tobacco businesses with Liggett, to the
benefit of LeBow and his partners."
"LeBow then sought to enlist others in his scheme," the
complaint states. "At various times over the summer he personally solicited
major figures in the international tobacco industry to form a consortium under
his leadership that would acquire sufficient shares of RJR to take effective
control of the corporation..."
"One such prospective partner solicited by LeBow is Lucio
Tan, a businessman in the Philippines. Among other ventures, Mr. Tan owns
Fortune Tobacco, a licensee of R.J. Reynolds Tobacco Company. In October
1995, LeBow initiated a meeting with Mr. Tan in the Philippines. Mr.
LeBow told Mr. Tan that he was forming an investor consortium to acquire
some 21 percent of the stock of RJR. Mr. LeBow further told Mr. Tan that
he believed that a group holding 20 percent or more of RJR stock could
exercise effective control of the company. LeBow invited Mr. Tan to join
the consortium by acquiring five percent of the RJR common stock,
representing an investment of $500 million. Mr. Tan declined LeBow's
invitation." "LeBow's reason for failing to disclose his true agenda is
clear: as LeBow understands, RJR shareholders would refuse to support his
consent solicitation if they knew that LeBow's true intention is to buy,
through a consortium of investors, a controlling stock interest in RJR for
less than its fair value," the complaint says. "In light of LeBow's
checkered history, involving bankruptcies, litigation and a pattern of
using the entities he controls for personal gain, as well as the similar
background of his ally, Icahn, it would be disastrous to LeBow's consent
solicitation for LeBow to reveal his true intention of obtaining sufficient
shares, directly and through other aligned with him, to exercise de facto
control over RJR."
CERTAIN ADDITIONAL INFORMATION: RJR Nabisco Holdings Corp. will be
soliciting revocations of consents to the proposals of Brooke Group, Ltd.
The following individuals may be deemed to be participants in the
solicitation of revocations of consents by RJR Nabisco Holdings Corp.: RJR
Nabisco Holdings Corp.; John T. Chain, Jr.; Julius L. Chambers; John
L. Clendenin; Steven F. Goldstone; H. John Greeniaus; Ray J. Groves;
Charles M. Harper; James W. Johnston; John G. Medlin, Jr.; Robert S.
Roath; Rozanne L. Ridgway; and Huntley R. Whitacre. As of October 31,
1995, Mr. Chain is the beneficial owner of 8,393 shares of the company's
common stock; Mr. Clendenin is the beneficial owner of 6,846 shares of
the company's common stock; Mr. Greeniaus is the beneficial owner of
126,308 shares of the company's common stock; Mr. Groves is the
beneficial owner of 7,000 shares of the common stock; Mr. Harper is the
beneficial owner of 524,882 shares of the company's common stock; Mr.
Johnston is the beneficial owner of 114,381 shares of the company's common
stock; Mr. Medlin is the beneficial owner of 7,259 shares of the
company's common stock; Mr. Roath is the beneficial owner of 44,205
shares of the company's common stock; Mr. Ridgway is the beneficial owner
of 6,393 shares of the company's common stock; and Mr. Whitacre is the
beneficial owner of 27,891 shares of the company's common stock.
