November 22, 1997

Nabisco Shares Jump With Announcement Of New Chief

From Wire Reports
 

A top food industry executive credited with reinvigorating brands like Oscar Mayer, Jell-O and Kool-Aid while dumping underachievers at Philip Morris Cos. has been recruited to lead Nabisco out of its doldrums.

Nabisco Holdings Corp. shares soared 9 percent Friday after the surprise announcement that James Kilts had been named to succeed H. John Greeniaus as chief executive.

Nabisco closed up $3.87-1/2 a share at $46.87-1/2 on the New York Stock Exchange.

Kilts, 49, is taking over at a company whose brands include Oreo cookies, Ritz crackers and Planters nuts after 25 years in the food industry.

“The market sees Kilts as an agent of change,” said Steve Galbraith, who follows the food industry for Sanford C. Bernstein & Co.

The switch, announced Thursday night, comes as Nabisco sales have turned sluggish. The market is also awaiting a move by RJR Nabisco Holdings Corp. to spin off its 80.5 percent stake in Nabisco. RJR Nabisco shares were up more than 5 percent on the news, rising $1.87-1/2 to $36.37-1/2 in late trading on the NYSE.

Greeniaus, 52, is retiring effective Jan. 1 as chairman and chief executive of Nabisco for unspecified health-related reasons. He been chief executive for a decade, and will stay on as a board member.

Kilts, who was said to be unavailable for comment Friday, quit in March as executive vice president of Philip Morris with responsibility for Kraft Foods Worldwide.”Kilts is a proven leader,” said John McMillin, food industry analyst for Prudential Securities. “He rejuvenated what was once a tired domestic food company. He added a bit of zip to brands like Oscar Mayer and Jell-O and Kool-Aid.”

Kilts also shed product lines that were performing poorly, such as Lender’s bagels and Entenmann’s cakes and cookies.

Bernstein’s Galbraith noted Kilts sold several margarine brands to Nabisco while he was at Kraft, and speculated he would sell Nabisco’s margarine operations as well. “He didn’t like it at Philip Morris so there is no reason to think he will like it any better at Nabisco,” Galbraith said.

The analyst said Nabisco’s Brazilian milk, Canadian pasta, College Inn broth and Milkbone dog biscuit businesses may also be sold.

Nabisco has expressed disappointment at its recent sales performance. Sales were off 1.6 percent in the third quarter.

In addition to the CEO title, Kilts was named as president and a board member at Nabisco.

The job of Nabisco chairman goes to RJR chairman and chief executive Steven F. Goldstone.

Some of the stocks that moved substantially or traded heavily Friday:

NYSE

Rouse, up 2-7/8 at 31-1/16.

The big real-estate company announced plans to convert into a real-estate investment trust to capitalize on the tax benefits available to REITs and the wave of investor interest in them.

Atchison Casting, down 3-7/8 at 16.

The producer of iron, steel and non-ferrous castings warned that it expects its second-quarter earnings to be lower than Wall Street estimates.

Norrell, down 3-3/4 at 28-9/16.

The Atlanta-based strategic work force management company said late Thursday it will take a restructuring charge of about $18 million in the fourth quarter ended Nov. 2.

NASDAQ

BDM International, up 7 at 29-1/2.

TRW will acquire information technology company BDM International for $29.50 per share, a deal that is potentially worth about $980 million.

Micron Electronics, down 2-5/16 at 11-9/16.

The Nampa, Idaho-based maker of electronic products and provider of services for computing and digital applications warned that it will report minimal first quarter income.


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