Word: rjr
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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...
...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 not appear to favor management in a buyout." Members of the losing side...
...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 the winner, KKR partner Henry Kravis...
...size of the deal and the fortunes to be made appear to exceed any foreseeable benefits to U. S. industry. Seldom has corporate behavior seemed so questionable. -- An interview with RJR President Ross Johnson, who started the scramble. See BUSINESS...
COVER: The brawl for RJR Nabisco tests the limits of greed and American capitalism...