Word: johnson
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Dates: during 1980-1989
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...Ross Johnson had suspected he was heading for a fall. "They are not going to approve our bid," the RJR Nabisco president told TIME in an interview five days before his board of directors decided the giant company's fate. His foreboding was on target. On the night of Nov. 30, some 30 sleepless hours after the official bidding deadline had passed, the RJR directors named the winner in the biggest takeover wrangle in history. It was not the company's , president...
...stunning rebuff to Johnson, the board awarded the food-and-tobacco giant to Kohlberg Kravis Roberts, the leveraged-buyout specialists. Underdog KKR won even though the firm's final bid of about $25 billion in cash and securities, or $109 a share, was a bit less than the $25.4 billion, or $112 a share, that Johnson and his handful of top RJR managers had offered as their last stab. (The largest previous deal was Chevron's $13.3 billion takeover of Gulf in 1984.) "It was destined to happen this way," said a source close to the bidding. "The board could...
...outcome, which will need shareholder approval, was a startling upset of Johnson, 56, and his top managers, who put the company into play on Oct. 19 and at first seemed to have the inside track. But they were outfoxed and outclassed in a bidding war in which prices soared so high that they were no longer the ultimate measures of value. The KKR team surpassed Johnson's group in demonstrating to RJR's board that it intended to give a fair shake to stockholders and employees, that it had the financial experience to raise the huge sum involved and that...
Much of Wall Street and corporate America saw the board's choice of KKR as a repudiation of Johnson, who had become a symbol of executive greed after first proposing to buy out RJR (1987 sales: $15.8 billion) for $75 a share. Company directors were outraged when they read accounts, leaked by insiders, of how much Johnson and his seven colleagues planned to rake in from the deal: as much as $2.6 billion. Though Johnson later insisted he had planned to share the potential gains with 15,000 RJR employees, the battle lines were clearly drawn -- not just between Johnson...
Board members first showed their unhappiness in October when Johnson and KKR began publicly brawling over a possible joint bid. Angered by the spectacle, the directors called for outside offers. KKR, headed by Kravis and his cousin George Roberts, 45, made its own bid, and so did a team composed of the First Boston investment firm and Chicago's billionaire Pritzker family. The Pritzkers topped the first round of bidding with a preliminary offer of $27 billion, or about $118 a share for RJR stock that had traded for just $56 on the eve of the battle. The Johnson group...