Word: kkr
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Dates: during 1980-1989
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...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...
...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 it would try to keep most of the company in one piece. After being named...
Leveraged buyouts seemed like a small-time, unglamorous financial gimmick when KKR began hawking them on Wall Street in the mid-1970s. But the arrangements were an immediate hit with managers who saw the wisdom of taking their companies private to escape corporate raiders. LBOs were also a boon to promising firms that wanted to grow outside Wall Street's harsh spotlight...
...times the amount of a manager's original investment. With investors lured by such prospects, the value of completed LBOs soared from just $13.4 billion in 1984 to $76.8 billion so far this year. Since 1985, four of the ten largest LBO acquisitions have been made by KKR...
Some deals have fallen short of their fanfare. KKR hailed the purchase of Beatrice as the "deal of the century," but wound up getting stuck with businesses that have not yet found buyers. "Beatrice was overadvertised as a spectacular deal when it was really just a good one," said one investor. "Everybody's making money; they're just not making as much money as they thought they would, or as fast as they could...