Tobacco Growers Cheer LeBow's Defeat In Effort to Break Up RJR Nabisco
Apr. 17, 1996
WINSTON-SALEM, N.C. (AP) _ Shareholders of RJR Nabisco Holdings Corp. gathered today for the company's annual meeting, just one day after investor Bennett LeBow admitted defeat in his bid to split up the food and tobacco company.
The financier's sudden concession, however, turned the gathering deep in the heart of tobacco country into an anticlimax.
A large meeting room in the city's downtown convention center drew about 1,000 people, but there were empty seats and the event was a far cry from the raucous, well-attended meeting that had been expected.
RJR chairman Charles Harper asked early on if any LeBow representatives were present. His question was met with silence. LeBow had said Tuesday he would not be showing up.
LeBow, together with investor Carl Icahn, had sought to supplant RJR's current board of directors with their own slate, which would then be in a position to push through a spinoff of the company's Nabisco food business, creating two stand-alone companies.
In announcing Tuesday that his board members would not win election, LeBow said the defeat had come as no surprise. ``We always knew we were facing an uphill battle.''
Nevertheless, the vote on his slate of directors, who would be in a position to push through the spinoff, was taken this morning. Word on the outcome was expected later in the day.
LeBow's defeat had brought some cheers here, a region were people make their livings with tobacco.
``We were not appreciative of Mr. LeBow's efforts and the way he did things,'' Dean Rouse, a tobacco grower from Kinston, N.C., said Tuesday after LeBow's concession. ``It was a blow to the entire industry for someone to take the steps he took.''
LeBow didn't win many friends in tobacco states when he agreed as majority stockholder in Liggett Group's parent company to settle a nationwide class-action suit against the tobacco industry.
Smokers sued the nation's leading tobacco companies, charging they became addicted to the nicotine in cigarettes.
LeBow had hoped the settlement would obliterate liability issues that have put downward pressure on tobacco stock prices. RJR cited the tobacco lawsuits as a reason not to split up the company.
LeBow's settlement weighed heavy on the minds of tobacco growers like Dan Wynne. Since 1949, his family has made its living from the ``golden leaf'' that was raised on his small farm in Tactolus Township, N.C.
The farm also is located in Pitt County, which has the distinction of being the top leaf-producing county in the nation's top flue-cured tobacco state. Flue-cured tobacco is used to make cigarettes like RJR's popular Winston brand and Philip Morris' top selling Marlboro brand.
``If he (LeBow) had taken over RJR and become the chief negotiator for the company, he might have said `Let's go ahead and settle,' '' Wynne said in a telephone interview Tuesday. ``That would have put a big burden on the entire tobacco industry.
``I think he would have thrown in the other companies to make a deal for his own pocketbook,'' he said. ``It would really have effected Pitt County. It would tear up farming operations.''
Wynne, who quit smoking after 56 years, has heard it all when it comes to attacks against tobacco.
``It is a legal product that has been controversial ever since Indians first smoked it in their teepees,'' he said. ``I'm not saying it's the perfect product, but there was many other products that are just as harmful as tobacco if you abuse them.''