EXHIBIT 2
June 20, 2000
Mr. Bob Mitchell
Chief Financial Officer
Icahn Associates Corp.
767 Fifth Avenue
New York, NY 10153
Dear Mr. Mitchell:
You have informed us that you are contemplating proposing a transaction to
Nabisco Group Holdings Corp. ("NGH") pursuant to which a newly-formed affiliate
of yours ("Newco"), which will own the shares of NGH presently owned by you and
your affiliates, will merge with and into NGH, with NGH being the surviving
company. You have outlined the proposed transaction to us as follows: the
stockholders of NGH, other than you and your affiliated companies, would receive
cash and notes in cancellation of their shares and the stockholders of Newco
would receive all of the outstanding shares of the surviving company, in
cancellation of their Newco shares. Following the transaction, all of the shares
of the post-merger NGH would be owned by your affiliates. The cash portion of
the merger consideration would be financed in part by funds which you would
contribute to Newco and in part by funds to be dividended by Nabisco Holdings
Corp. ("NH") to all of its stockholders, including NGH, immediately prior to the
closing to the merger. It is contemplated that the dividend would be financed by
new debt to be incurred by NH.
Subject to the qualifications and conditions set forth below, The Industrial
Bank of Japan, Limited ("IBJ") (i) is highly confident, as of the date of this
letter, that it could obtain commitments from lenders for a senior secured
credit facility (the "Senior Credit Facility") to be made available to NH, in an
amount of up to of $5.5 billion (assuming a refinancing of current debt at NH of
approximately $4 billion), and (ii) in our view, up to $2 billion of
subordinated debt (the "Subordinated Indebtedness") could be accommodated in the
capital structure of NH, for a total of $7.5 billion of new debt at NH.
Proceeds of the Senior Credit Facility and the Subordinated Indebtedness
(collectively, the "Facilities"), after refinancing of existing debt at NH and
payment of certain expenses associated with the Transaction, would be permitted
under the Senior Credit Facility to fund the Dividend from NH to NGH in an
amount that we estimate to be approximately $2.7 billion (net of the dividends
paid to other NH shareholders) to finance a portion of the purchase price for
the Purchased Shares.
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Our expressions of confidence in our ability to consummate placement of the
Senior Credit Facility is subject to: (i) there having been in our sole judgment
no material adverse change in financial condition, results of operations,
business or prospects of NGH, NH, Newco, or their subsidiaries since December
31, 1999; (ii) there not having been in our sole judgment any material adverse
change in the markets for senior debt financings, high yield securities or the
capital markets in general; (iii) our receipt of audited and unaudited
historical financial statements (including unaudited pro forma financial
statements) of Newco, NGH and its subsidiaries, and NH and its subsidiaries
acceptable to us and conforming to the requirements of the Securities Act of
1933, as amended, and the rules and regulations promulgated pursuant thereto for
registration statements filed thereunder, (iv) completion of additional due
diligence on NGH and its subisdiaries to our satisfaction and our not having
discovered or otherwise becoming aware of any information not previously
disclosed to us that we believe to be inconsistent in a material and adverse
manner with our understanding, based on the information provided to us prior to
the date hereof, of the business, operations, property, condition (financial or
otherwise) or prospects of NGH, NH, or their subsidiaries; (v) the Facilities
being on terms and conditions, including pricing and fees, that in our view are
appropriate for facilities of those sizes, types and purposes and that are
satisfactory to us, and the Transaction being on terms and conditions
satisfactory to us; (vi) the Facilities and the Transaction being provided for
and consummated pursuant to documentation satisfactory to us; (vii) Newco having
received the Contributed Shares and, in addition, equity in the form of cash in
an amount and upon terms satisfactory to us, and the consolidated pro forma
capitalization of Newco, NGH, and NH, assuming completion of the Transaction,
otherwise being acceptable to us; (viii) receipt by NGH, Newco, and NH of all
required approvals, including without limitation satisfactory receipt and review
of the SEC review and approval of the Transaction and the Facilities and receipt
of all other necessary government approvals and third party consents, and
approval of the boards of Newco, NGH, and NH; (ix) no change or proposed change
in federal law or the laws of any jurisdiction in which Newco, NGH, NH, or their
subsidiaries operate that could reasonably be expected to adversely affect the
Transaction; (x) NH having raised a minimum of $2.0 billion of Subordinated
Indebtedness on terms and conditions satisfactory to IBJ, and (xi) no competing
financing by you, any of your affiliates, Newco, NGH, or NH being offered or
arranged other than those that you have disclosed to us prior to the date
hereof.
It should be understood that this letter does not constitute or give rise to any
commitment or obligation on the part of IBJ or any of its affiliates, including
to provide any of the Facilities, provide any other financing, or provide any
advisory or placement service. Any such obligations would relate only to the
Senior Credit Facility, and would arise only after negotiation and execution of
a separate written agreement acceptable to IBJ and such affiliate, in their sole
discretion, and after consideration and internal approval, including but not
limited to credit approval, by IBJ and such affiliate, in their sole discretion,
in addition to the above referenced qualifications (and we can give no assurance
that such approval would be obtained).
This letter is solely for use by you, and may not be disclosed, except with our
prior written consent, to anyone other than your officers, employees and
advisors, and the officers, employees, attorneys and advisors of Newco, NGH
and/or NH, in each case on a confidential and need-to-know basis.
Notwithstanding the foregoing, this letter may be disclosed by you in filings
with the Securities and Exchange commission related to NGH and NH, pursuant to
applicable rules and regulations.
You should be aware that other companies with interests that may conflict with
yours
may be or become customers of IBJ or its affiliates and IBJ or its affiliates
may be providing or in the future may provide financing or other services to
them.
Very truly yours,
Industrial Bank of Japan, Limited
By: /s/ John Veltri
Name: John Veltri
Title: Joint General Manager
