Ross Johnson: The Unconventional CEO

Unique Approach to Corporate Leadership

Ross Johnson, former CEO of Standard Brands, shifted the corporate paradigm with his unconventional management style. He successfully breathed life into this company, largely due to his unique approach, one characterized by creativity and a deft hand at corporate political navigation.

Relatability: Key to Success

Born into a lower-middle-class family in Winnipeg, Johnson's entrepreneurial spirit propelled him up the corporate ladder. His talent for salesmanship and knack for making people feel at ease cemented his success. His extravagant habits and love for socializing didn't detract from his achievement.

Daring Decisions and Noteworthy Achievements

Never one to shy away from risk, Johnson frequently reorganized Standard Brands to enhance its performance. He made bold moves, such as the merge with Nabisco in 1981, despite initial resistance. The outcome, Nabisco Brands, was one of the largest food companies of the era.

The Downfall

While successful in his ventures, Johnson faced backlash due to his lavish lifestyle and indifferent attitude towards the company. His reign came to an end in 1988 when he was forced to resign from Nabisco Brands. Nevertheless, his influence on today's corporate climate remains unmistakable.

Influential Legacy of The Reynolds Tobacco Company

Reynolds' Decisive Impact

Reynolds Tobacco Company wielded considerable influence in Winston-Salem, North Carolina, shaping both its skyline and economic landscape. Their headquarters, a 22-story architectural marvel, was a testament to their significance. This prominent presence, in turn, attracted other heavy hitters like Wachovia Bank and the state's largest law firm.

Beyond Urban Development

Reynolds' impact wasn't confined to city development, but also contributed to the state's academic and healthcare sector. The teaching hospital and Wake Forest University stand as monuments to their generosity, while the company's name still resonates locally despite challenges from competitors and shifting smoking attitudes.

Swift Ascendancy and Rigidity in Leadership

Journey to the Throne

Ross Johnson's meteoric climb to the helm of RJR Nabisco was steeped in controversy. Ascending the echelons promptly, he took on the role of CEO in 1986 following a merger he choreographed with Reynolds, just two years after he had landed at Nabisco. A reputation for significant corporate upheaval trailed him, with no signs of quelling his disruptive tendencies.

Leadership by Shake-Up

In his quest to consolidate power, Johnson estranged himself from the existing Reynolds regime while importing trusted allies from his former company, Nabisco. These drastic maneuvers sparked a backlash from the Winston-Salem populace, who accused Johnson of being excessively ostentatious. His decision to transition operations to Atlanta was seen as a slap in the face of the local community.

Elaborate Expenditures

Johnson’s flashy lifestyle added fuel to the public outcry. He lavished himself with luxurious trips, a trove of golf clubs, helicopters, and personal jets. His decision to uproot the company headquarters, resulting in job losses, further eroded his popularity. This massive exodus coupled with his seemingly casual approach towards corporate debt made for a prickly public opinion of his leadership.

Leveraged Buyout Reconsiderations

Upon contemplating a Leveraged Buyout for Nabisco, Johnson and his team encountered a stumbling block – untenable coverage ratios. Traditionally, firms are often conservatively run post-LBO to release funds. But the prospect of cost-cutting did not sit well with Johnson, who was unprepared to risk his abundant wealth for more of the same.

Setting New Priorities

With his flamboyant lifestyle safe from the austerity measures of a post-LBO scenario, Johnson turned his gaze towards enhancing the company's operations. He discarded the LBO plan and explored other grand ideas with his team, such as offloading the ESPN stake and bidding for a British candy business. Burning with optimism, Johnson hoped to be at the helm, steering the company's destiny even in five years.

The Path Towards a Leveraged Buyout

CEO Johnson's Stock Concerns

Ross Johnson, the man steering the ship at RJR Nabisco, finds himself grappling with a less than ideal stock price. Pondering various strategies to provide a much needed boost, he casts thoughts towards a collaboration with Pillsbury and even a potential leveraged buyout. A ray of hope shines through as Johnson engages with Dick Spangler, a major shareholder suggesting that very option – a leveraged buyout.

Juggling Professional and Personal

The corporate world's unprejudiced appetite for takeovers is unleashed, with Johnson's company in the crosshairs. Amidst this brewing storm, Johnson also attends to personal troubles, particularly his son's unfortunate car accident. Even in such turmoil, he discerns that a leveraged buyout could be the panacea for his company's stock conundrum.

The Pursuit of a Boardroom Breakthrough

On the other side of the table, Beck and Kravis are keen on making an offer to Johnson but find themselves hitting a brick wall. Unable to guarantee Johnson the controlling grip over the board that he desires, they acknowledge the need for a direct dialogue. They seek Welch's help to arrange a conference, but in this intense races, their request could already be obsolete before it even gets off the ground.

The Rise and Challenge of Leveraged Buyouts

Monumental Parties and Mammoth Deals

Ever wondered about the fabulous world of finance and high society gatherings, where dazzling donors, teenage violinists, and big-figure buyouts coexist? Meet Henry Kravis and Carolyne Roehm, who throw illustrious parties on the back of thier $10 million Metropolitan Museum donation.

Linking Lavish Lifestyles and Buyouts

This couple wasn't just enjoying life in the new 'Nouvelle Society.' They were also key players in the leveraged buyouts (LBOs) trend of the 1980s. Their firm, Kohlberg Kravis Roberts & Co. (KKR), despite experiencing its fair share of internal disputes and surges of competition, stood as a dominant force in the LBO industry, constantly seeking bigger funds for bigger business deals.

The Quest for Bigger Deals

For Kravis and Roberts, mega-deals were the goal. The larger the deal, the less additional work and the more substantial fees they could pocket. To stay at the pinnacle of the fast-paced LBO industry, these high-flyers never settled; they were always pushing boundaries, always making strides towards the next big thing.

A Game-Changing Day for Johnson

The Break of Day: Meetings and Expectations

After wrapping up board meetings, one would expect a standard day for Johnson. However, life had other plans. With a busy schedule of a compensation committee session and a full board assembly, Johnson woke up to a day as unpredictable as life itself.

News Predictions and Unexpected Calls

Despite the newspaper's forecast stating RJR Nabisco wouldn't encounter any mergers, the day took an interesting turn. Concerned calls from Grierson and Hugel about LBO made sure of that. The committee meeting was rightly postponed due to the conceivable conflict of interest.

Anncouncement Chaos and Media Mayhem

The splash made by the announcement of the LBO was more like a tsunami. The tremors were felt throughout RJR Nabisco, leading to a media sieve. News stations daringly positioned themselves outside, news flooded switchboards, and Johnson found himself confined within the headquarters.

Wall Street Waves and Corporate Rebellion

The epicenter of these tremors? Wall Street. Still bruised from a previous stock crash, the sudden news of LBO and consequent chaos was hardly ideal. However, the commotion had an unlikely hotspot - the merger business, drawing in significant profits. At this stage, 'The Group' led the scene toppling the elites of Wall Street.

Shockwaves and Opportunity Hunts

The clandestine dealing was far from contained. Various players in the Wall Street scene were affected and reacted. Kravis' shock, Gleacher and Waters' quest for answers, Beck's ire - the reactions were varied. However, Bill Strong saw an opportunity in the turmoil, pitching the idea to Salomon's chairman. Amidst all this, Johnson held meetings to discuss the LBO with bankers, thereby setting the stage for an enthralling corporate saga.

The Intrigue Behind the Acquisition of RJR Nabisco

A Convoluted Game of Corporate Chess

Tom Hill found himself pondering over RJR Nabisco's potential takeover by Henry Kravis during a strategy session. Quick to action, he confirmed the interest directly from the horse's mouth. Hill roped in Peter Cohen, a colleague, to apprise him of the unfolding situation. A fateful meeting with Kravis confirmed the tycoon's intent to acquire RJR Nabisco, threatening any possible moves by Shearson. Despite their best attempts, Hill and Cohen failed to persuade Kravis to consider a joint venture, spurring anxieties about extensive competition and Kravis's real intentions.

The Strategic Tug-Of-War

To stave off a hostile takeover, Pillsbury enlisted a battery of Wall Street firms. The undercurrents of conflict were apparent – Hill, Shearsons' representation, learned of Kravis's interest in Nabisco, prompting an urgent meeting. Cohen was initially reticent, only later agreeing to the discussion. Though they gathered to discuss their interests, Kravis and Cohen found no common ground. Investors and key players like Wasserstein Perella were roped in for defensive measures, ultimately leading to a chain of discussions, proposals, and negotiations.

The Multi-Million Dollar Bet

An unprecedented tender offer from Kohlberg Kravis threw everyone for a loop. At a staggering $90 a share, advisors and lawyers were left spinning. Even as rumors swirled, Jeff Beck and Bruce Wasserstein found themselves under scrutiny from Kravis's camp. This disclosure damaged trust, prompting Kravis to turn inward to his team. The ripple effect was tangible – the bid forced Salomon Brothers to abandon their acquisition plans for Nabisco stock entirely. Amidst the turmoil, Johnson made the surprising call to back down – an unexpected endgame to this highly-charged move.

Battle of the Bonds: Rivalry in the Financial World

The Ironclad Opposition

Enter Theodore J. Forstmann, a business mogul with a bone to pick with one particular financial instrument, the junk bond. He views these high-yield bonds as a dangerous beast, turning the leveraged buyout industry into a high-risk gamble and jeopardizing the economy at large. The craze for these quick-profits tools has upset the traditional markets, he believes.

Identifying the Rival

Forstmann’s fury finds a personification in Henry Kravis, co-founder of Kohlberg Kravis Roberts. Kravis, in Forstmann's books, is a mere junk-bond peddler, causing an inflation in takeover prices and throwing stumbling blocks in Forstmann Little's path to successful acquisitions. This rivalry runs much deeper than just surface-level business competition.

Personal Baggage Fuels Fight

The resentment Forstmann harbors towards Kravis finds roots not only in their professional face-offs, but also in his personal life. Hailing from a prosperous yet disturbed family with an abusive father, Forstmann's will to prove his mettle is unshakeable. His abhorrence for Kravis and the junk-bond industry powers his determination to stand his ground and protect his business's reputation.

Navigating Corporate Tensions

Things Take an Unexpected Turn

It’s chaos at Shearson, as the management group learns of an unanticipated bid from Kravis, leaving the previously constructed partnership tethering. A sense of mystification clouded the room, making everyone uncertain of the road ahead. The ambiguity of Johnson's intentions and his potential alliance with Kravis raises concerns among members.

Meeting to Break the Ice

Eventually, decision time comes for Johnson, as he determines to meet with Kravis to understand his proposition. Meanwhile, Shearson decides to stick with Johnson, despite receiving an improved yet unsatisfactory offer from Kravis. Full of doubts, both sides conclude their heat-infused meeting, their next steps unclear.

Plummeting Trust, Uprising Frustration

When Forstmann learns about his camp's secret meetings with Kravis, a wave of betrayal hits him. His trust in Johnson comes crumbling down, replaced by a strong sense of disappointment. Despite the glaring dissatisfaction, Forstmann chooses to side with Johnson, ready to negotiate terms on his own, as Johnson's negotiations with Kravis meet a dead end.

Navigating Tactical Takeovers

Negotiating the Nabisco Frontier

When it boils down to tactical talks and tense takeovers, no event echoes louder than the RJR Nabisco takeover. Negotiations met with chaos as Cohen, leading his well-equipped troops, prepared to clash swords with Kravis over a mouth-watering tender offer of $90.

Shearson, unfortunately, fell short in matching up with Kravis due to their lack of essential expertise. In an attempt to tilt the playing field, Cohen saw the advantage of integrating Salomon into the deal as an influential partner.

Unsettling Alliances and Legal Limbo

A union between Forstmann Little and Shearson materialized, but it wasn't without its fair share of issues. A battle of bankers brought in problematic interbank conflicts, troubling the smooth sailing waters of their collaboration.

Linda Robinson, a PR expert quite the heavyweight in her arena, was backing Johnson while also playing diplomat with Kravis. Forstmann, on the other hand, was wrestling doubtes about teaming up with Shearson, skeptical about the legality of Johnson's management agreement.

Decisions and Doubts

The culmination of the Forstmann-Shearson meeting was decidedly unsatisfactory, leaving Forstmann uneasy about the unsettling development and the accompanying fees. Confirmations about reconsidering deals hovered in the air as Forstmann and Fraidin deliberated, adding another layer to the already complex situation.

In the end, straining against the whirlwind they were caught up in, the Forstmanns finally made the call to withdraw from the deal, a decision that held serious implications for the saga that was the RJR Nabisco takeover.

Navigating the Challenges of Leveraged Buyouts and Takeover Deals

Know Your NumbersDiving into a leveraged buyout (LBO) demands serious scrutiny of the company in question. Estimating debt, appraising assets, and gauging the sustainability of the business is cardinal to this process. Let's take a closer look at how Henry Kravis, handling the RJR Nabisco, maneuvered through this type of situation.

Access DeniedDespite importance, the path to information wasn't straightforward for Kravis. Key insights like Johnson and Cohen had were not within his grasp. His main source of information? Interviews arranged by the special committee with RJR’s executives. Unfortunately, their willingness to cooperate was lacking, leaving Kravis feeling like an outsider in the bidding process.

Perception MattersVenturing into the second situation, there's a clear indication how a player's image can influence the final decisions. Salomon’s reluctance to adopt an inferior role compared to their rival Drexel led them to abandon the biggest takeover deal ever. As negotiations got intense between Salomon and Shearson over bond offerings, it was clear that the perception issues were causing frustrations.

Frustration and FailureRJR Nabisco's CEO, Johnson, wasn't impressed with the bickering and the stalled progress. As the tension heightened, Salomon's bankers criticised Drexel’s reputation, adding more fuel to the fire. In the end, talks fell through, much to an already distraught Johnson's dismay. Understanding these examples could provide valuable insights when navigating similar waters.

Strategic Challenges & Responses Amidst RJR Nabisco Bidding

The Dilemma of Forstmann Little & Co.

Forstmann Little & Co. found themselves in a complex dilemma - a high-stakes bidding for RJR Nabisco. The company believes the desired returns on Nabisco were unattainable, not unless they consider the risky measure of using junk bonds.

The Reluctance to Delve into Junk Bonds

Sadly, they were hesitant to make the plunge, a direct result of their preceding disdain for junk bonds. Considering their past sentiments towards such risky financial assets, they found themselves in a difficult spot with limited maneuverability.

A Press Release Turned Sour

In the midst of their conundrum, a daring idea surfaced - that of halting the bid and sharing their reasons with the public via a press release. Despite the initial zest for this plan, Peter Atkins, their legal advisor, held a swift intervention to discourage it

The Fear of Frightening Banks

The rationale behind Atkins' intervention? Keep the banks at ease and not hinder the bidding progress of other hopefuls. And thus, Forstmann Little & Co. found themselves bowing out of the game, a brief press release their parting shot and no reasons stated.

A Race against Time in Investment Banking

The Wall Street Wobble

In the wake of key personnel leaving, Wall Street investment bank First Boston finds itself in an unenviable state. Missed major deals like the RJR Nabisco takeover are squeezing them tight. Yet, James Maher, the co-head of the firm's investment banking and merger departments, steps up to the challenge.

Chasing The Deadline

As the clock ticks, four lawyers, each from a different law firm, are hustling to deliver a bid letter in time. Stuck in the heavy traffic with the deadline looming large, they decide to sprint the remaining two blocks. Upon reaching their destination, they encounter an unexpected hurdle - a teeming crowd of photographers and journalists blocking their path.

The Race to Delivery

In the meanwhile, another lawyer, Casey Cogut, appears to have mastered the art of time management, managing to deliver his bid just in the nick of time. Amid these high-stake races, First Boston finds itself in a soup, struggling to finalize their bid. Two of its bankers grapple with the delivery of their bid, arriving at a deserted Skadden Arps. 

Intriguing Turns in the RJR Nabisco Acquisition Saga

Ambitions and Unorthodox Proposals

Multiple parties coveted RJR Nabisco, ranging from well-known contenders such as Ross Johnson and Henry Kravis to unanticipated outsiders. Bizarre offers sprung up, with one Maryland player laying down $126 per share and a Toronto participant proposing an intriguing twist on his $123 per share bid. Amid this frenzy, Peter Atkins and Mike Mitchell stood poised for any legal issues, ensuring all rules were adhered to during the potentially hazardous auction process.

Surprises and Legal Dilemmas

As the bid documents rolled in, Johnson had offered $100 per share, besting Kravis's $94. Just as the management committee was preparing to crown Johnson on a Sunday morning, a curveball arrived with First Boston's proposal. Orchestrated by Jim Maher, it sported loopholes that could amp its worth by a whopping $3 billion, despite being somewhat undercooked and short on financing. The tax counsel in the fray had to juggle his unease about potential conflicts of interest with his belief in the proposal's legitimacy.

Uneasy Moments and Calculated Moves

Down the wire, the Kravis group discovered unsettling discrepancies in their bid, yielding a flurry of worries about procuring precise data for the special committee. In response, their legal team took a stand, dispatching a letter to voice their concerns over the dubious information provided by RJR Nabisco's management. Intermittently, the tethering climax experienced pauses as deadlines were extended, and Maher's group got extra time to solidify its offer.

Courting Anxiety and Strategizing Despite Defeat

The outcome raised mixed feelings, with Johnson conceding defeat in his bid and Cohen tasting a victory they hadn't anticipated. The Kravis cohort decided to play it cool, concealing their next course of action regardless of their third-place finish. Meanwhile, Bruce Wasserstein became the target of a misinformation campaign aimed to guard the Kravis group's tactics. Amid this roller-coaster of events, Kravis's unyielding resolve stood out, assuring those around him that he was not done yet with the RJR Nabisco venture.

The Intrigue of Wall Street Bidding

Battle for Control

Throughout the quiet halls of Wall Street, anticipation for the RJR Nabisco auction grips the financial world. But within its epicenter, First Boston's head Jim Maher and his team prepare for war. They're about to exhibit their grit and tenacity, to launch the biggest takeover bid in Wall Street history. Still, with great ambition comes greater obstacles, as they scramble to secure the necessary financing.

Boardroom Betrayals and Bidding Wars

Meanwhile, Ross Johnson faces personal turmoil, his trust shattered by his own board's actions. As the Pritzker group mulls over partnering with First Boston, rumors of Henry Kravis not placing a bid agitate the waters. Yet, amidst all speculations, Shearson's Tom Hill remains unflappable, confident and dismissive of these unsettling rumors.

Risky Measures and High-Stake Decisions

This tenuous journey progresses with further challenges for First Boston. As Jerry Seslowe encounters obstacles in securing investor commitments, time is running out with bidding deadline looming. In a twist of fate, the Pritzkers inject much-needed life into the process, providing a critical financial lifeline. After much deliberation, Kravis, Roberts and their investment bankers decide to play their hand, refining their financial structure to place their bid.

Climactic Stage: The Final Bid for RJR Nabisco

Anticipation and Anxiety in Waiting

It's that suspenseful moment in any high-stakes game: the bids are in for RJR Nabisco and now, it's all a matter of waiting for the result. Yet, that waiting is anything but passive. For the team at Shearson, their high spirits are slowly being eroded with every silent hour that passes after their bid submission, their anxieties creeping up.

Joking Around: Table Talk Between Rivals

Meanwhile, there's an intriguing exchange over dinner between Jim Robinson and Eric Gleacher. As they banter light-heartedly about their respective bids, the underlying strategic game of revealing just enough but not too much is tangible. A jest here, a suggestion there - it’s a deceptive chatter of espionage in a cordial setting.

The News Breaks: Losing the Bid

Up till now, it's all been a tense yet thrilling play of bid and wait. And then falls the hammer. The RJR Nabisco team, including Ross Johnson and Linda Robinson, discover the bitter news of Kravis's bid from a wire story. The realization hits them - their bid has likely lost out and it's time to face the music. Agitation ripples through the team as they grapple with understanding the situation and strategizing their next move.

The Fierce Takeover Tussle of RJR Nabisco

Heart of the Bidding War

A saga unfolds in a suspense-laden board meeting of RJR Nabisco. The board members, gathered to determine the victor amidst a heated bidding war between Kohlberg Kravis Roberts (KKR) and a management team spearheaded by Ross Johnson, grapple with a monumental decision. Hours are spent meticulously evaluating the two potential suitors, each with merit and promising prospects. Eventually, a resounding consensus resonates as the board vote sways in favor of KKR's bid.

Gruelling Decisions and Rising Tensions

As negotiations intensify, the management group ups the ante, raising their bid to a startling $112 per share. This bold move stirs the pot, leading to escalated tensions around the negotiation table. The board, in this whirlwind of raised stakes, takes careful consideration of the new bid and its implications, assessing the management group's securities and discussing possible negotiation terms.

Subsequent Developments and Future Course

Meanwhile, Ross Johnson's gracious acceptance of defeat marks a shift in favor of KKR. Despite losing the battle for RJR Nabisco, Johnson maintains a level head, even opening a bar for his executives to celebrate. Subsequent to this landmark decision, the industrious CEO ventures into a fresh business endeavour, forming RJM Associates. Marinated in speculation, many see this as a hint of a potential comeback, signifying Johnson's unyielding spirit.

Key Influencers of the RJR Nabisco Buyout

Understanding the Power Players

Delving into the tumultuous realm of the RJR Nabisco leveraged buyout, several influential figures emerge. At the helm of RJR Nabisco, we find F. Ross Johnson taking charge as the President and CEO, flanked by other crucial members such as Edward A. Horrigan Jr., the Chairman of RJR Tobacco, and CFO, Edward J. Robinson.

A Glance at the Advisory Teams

Consider the constellation of key advisors during this era. The American Express team was led by James D. Robinson III. A simultaneous gaze at Shearson Lehman Hutton reveals a robust team featuring Peter A.Cohen as the chairman and CEO.

The Corporate Financiers

Step into the illustrious corridors of Wall Street to meet John Gutfreund, Chairman of Salomon Brothers. But it's hard to ignore the presence of Kohlberg Kravis Roberts & Co, where Henry Kravis and George Roberts command attention as general partners.

The Bold and the Brave

Last but not least, acknowledge the trailblazers - Jeffrey Beck from Drexel Burnham Lambert, known infamously as 'The Mad Dog', and Theodore J. Forstmann, a senior partner at Forstmann Little & Co. Their audacious moves continue to shape the very fabric of corporate deals.

Intricacies Surrounding the RJR Nabisco Deal

The Dynamic Tale of RJR Nabisco

An interesting kaleidoscope of events and conversations characterizes the RJR Nabisco transaction journey. Packed with information on various entities whose destiny got entwined together, the deal reveals intriguing facets of corporate America.

Action Figure: Dr. O.C. Adams

Consider Dr. O.C. Adams, who decides to unwrap his story about Ross Johnson only after obtaining the latter's permission. There's a testament to loyalty and discretion in business relationships right there!

A Shadow of Suspense

An undercurrent of suspense is deftly woven with the revelation that Drexel Burnham and Michael Milken were nursing some potential legal wounds in the form of possible securities laws violations. It certainly adds a shade of intrigue to the unfolding saga.

Unforeseen Challenges

The tale takes an interesting turn with the unfortunate death of Lou Roberts in 1977, adding to the unforeseen hurdles in this corporate journey. Also, the freezing out of Peter Solomon in the RJR Nabisco deal puts a spotlight on the corporate power play and strategic maneuvering common in such high-stake deals.

Navigating Corporate Power Battles

Unveiling Nabisco Drama

Burrough provides an immersive recount of the tussle for RJR Nabisco's reins in 1988. Deep-diving into this corporate feud, the crux is decorated with insights from over a hundred profound interviews conducted within 1989, featuring major influencers like Jim Maher, Ted Forstmann and CEO Ross Johnson.

Inside the Leveraged Buyout Maze

The narrative remains unbiased, shunning definitive remarks on leveraged buyouts' impact on American economy. Yet, the underpinnings suggest that LBOs painting different pictures across companies, with temporal elements playing crucial cards in their success or failure.

The Human Aspect of Corporate Narratives

An extraordinary book's journey is often built on extraordinary encouragement, and that holds true here, with notable support from individuals like the Wall Street Journal's managing editor and the author's wives. These influencers breathed life into the inanimate corporate world, encouraging a storytelling style that thrived on reconstructed dialogues and multi-source accuracy checks.

Unravelling Business History: The RJR Saga

Fast-Paced Creation of a Business Classic

The pages of 'Barbarians at the Gate' echo the hustle and bustle of the 1980s business climate, a creation of the authors', that came together within a mere span of eight months. The intensive and dedicated research process involved extensive travels and numerous interviews, giving a deeply insightful essence to this business literature gem.

The Corporate Crusade of the 1980s

The book takes readers on a journey to the biggest corporate deal of that time, the war for RJR Nabisco. Immersing us in the tumultuous wave of corporate raids and junk-bond financing, it paints a vivid picture of the dramatic changes that defined this era.

The Evolution of the Boardroom

The book effectively marks a dramatic shift in the business playing field post the RJR takeover, signaling a new era of change. Enlightened by the battlefield tactics from the RJR saga, CEOs of the 90s stepped into the shoes of the 'barbarians at the gate', adopting their aggressive strategies and reshaping latest corporate governance.

The High-Stakes Game of a Leveraged Buyout

Conflict Amidst a Corporate Power Move

In a high-stakes dialogue, Steve Goldstone tries to deter Ross Johnson from pursuing a leveraged buyout of RJR Nabisco, emphasizing the risks and potential harm. Despite these warnings, Johnson remains unwavering, seeing the acquisition as a viable means of boosting shareholder value.

Boardroom Tensions Rising

The boardroom dynamics are tense, as Johnson forges ahead with his plan, braving the skepticism of the directors. Even as they voice concerns on the serious implications of the move - loss of control and adversely affected relationships, Johnson stays his course. In fact, his confidence extends to believing that his company ought to go to the highest bidder.

Green Light with Strings Attached

The directors, while wary, give Johnson the go-ahead to initiate the buyout. Yet, they're mindful of potential frivolity in the decided buyout price. In the midst of these uncertainties, the mission to amass $17 billion for the buyout looms large along with apprehensions about potentially competing bids post the planned press release.