Word: rjr
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Dates: during 1980-1989
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Even as Johnson backed away from his huge initial stake, rival bidders rushed in to get theirs. The competing offers turned the fight for RJR Nabisco, whose brands range from Animals Crackers to Winston cigarettes, into the brassiest and potentially most damaging brawl in Wall Street history. By last week three groups were locked in a titanic struggle for the company (1987 revenues: $15.8 billion), and the offering price has climbed above $26 billion -- more than the gross national product of Peru or Portugal and twice the sum that Chevron paid for Gulf Oil in 1984 in the largest previous...
...bring to American industry, that they raise deep and disturbing doubts about the direction of U.S. business at a time when many firms lag badly in foreign competition. Seldom since the age of the 19th century robber barons has corporate behavior been so open to question. The battle for RJR Nabisco seems to have crossed an invisible line that separates reasonable conduct from anarchy...
Except for its scale, the proposed RJR breakup was like many of the fruitless paper-shuffling deals that have proliferated in the past decade. The management group is planning to take apart a merger, between RJR and Nabisco, that they hailed only three years ago as a brilliant strategic move. "What is being done threatens the very basis of our capitalist system," said John Creedon, president of Metropolitan Life Insurance company, which is suing RJR because the potential buyout has undermined the value of all bonds that the food and tobacco company sold before the announcement. Not everyone was alarmed...
...RJR battle has brought several U.S. business trends of the past decade under greater scrutiny in Washington. Among the political concerns...
...RJR buyout aroused anxieties even in the investment community, where some executives feared that the Johnson-initiated scramble would swallow up too much of the available money for deals and, moreover, give mergers and LBOs a bad name. "This is the sort of excess that investment bankers have worried about for years," said economist Robert Reich of Harvard's John F. Kennedy School of Government, "because it so clearly exposes the greed and rapaciousness of so many of these takeovers." Martin Weinstein, managing director of Kubera, a Wall Street arbitrage firm, concurred: "Do I sense fear? Yes. At some point...