Word: kkr
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Dates: during 1980-1989
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Early on, KKR reportedly offered Shearson a $125 million "kill fee" to step aside. Cohen brushed off the idea as "personally insulting." Once serious talks began, the participants saw they had different strategies in mind. KKR preferred to sell the tobacco business to pay back the buyout loans and retain the food businesses, a good fit with the Safeway chain. Johnson's team wanted to keep the tobacco company and sell off Nabisco, Del Monte and the other non-tobacco parts of the business. Positions hardened shortly after , midnight Tuesday, when KKR partner Roberts made what may prove...
...real sticking point was the issue of power. KKR has always insisted on controlling the companies it acquires. That policy went squarely against Shearson's promise to Johnson that he could keep 51% of the voting shares. The talks broke off on Wednesday, after Johnson said he would have nothing further to do with KKR...
...week's end KKR had the highest offer on the table, but the Shearson team was preparing a new bid. Ultimately, RJR Nabisco's board of directors, which includes such outsiders as Charles Hugel, president of Combustion Engineering and Martin Davis, chairman of Gulf & Western, will probably have the final say on who, if anyone, buys the company. Some Wall Streeters think the financing will prove so difficult that KKR and Shearson will have to work together. In a conciliatory move on Friday, KKR said it would not press for selling off the tobacco division...
...what is good for shareholders and investment bankers is not necessarily good for the country. Certainly the thousands of workers who have been laid off as a result of KKR's deals see little virtue in leveraged buyouts. Top executives go along with or even instigate buyouts because as major shareholders they stand to profit. The resulting companies may be leaner, but often they are also weaker, with little money to invest in expansion or innovation. Says Michel David-Weill, the French senior managing partner of the Lazard Freres investment firm: "The wave of leveraged buyouts is weakening the competitiveness...
...CAPTION: KKR's LARGEST DEALS...