Word: rjr
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Dates: during 1980-1989
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...RJR Nabisco showdown may prove to be one of Milken's final moments of glory. He and Drexel are expected to be slapped any day now with criminal indictments accusing them of racketeering, mail fraud and other crimes. The charges would stem from two years of federal investigations that prompted the Securities and Exchange Commission to file a civil suit against Milken and Drexel in September, accusing them of 18 transactions including stock manipulation and other securities-law violations. Says a close associate of the embattled dealmaker: "Two years ago, Milken was on top of the world...
...date was portentous: on Oct. 19, precisely one year after the stock market crashed, the chief executive of RJR Nabisco was the host of a lavish meal at Atlanta's Waverly Hotel. Ross Johnson's guests had come to expect such treatment. A brash and hard-driving manager with a fondness for fine living, he liked to treat RJR Nabisco's board members to an elegant evening out before the next day's regular meeting...
...this night, however, Johnson's purpose was not just to be convivial. Declaring that he had tried everything he could during the past two years to boost RJR Nabisco's stock price, Johnson said he had found a solution: he and his fellow top managers would take complete control of the company in a leveraged buyout (LBO). Johnson would then sell off some of the company's food brands and run the remaining divisions as a private company. Surprised that a chief executive would initiate a raid on his own company, the directors nonetheless allowed him to mount what would...
...investment jump to $200 million when the sale was completed. That was only the beginning. By doing some simple arithmetic, critics of the plan calculated that the eight men's holdings, which were scheduled to grow to 18.5%, could be worth $2.6 billion within five years if they turned RJR Nabisco into a leaner and more profitable enterprise. Johnson's share alone would have been worth $1 billion...
Swamped by a wave of resentment, Johnson rushed last week to reassure the RJR board that he had intended all along to share the newly created wealth with the 15,000 employees who would remain after the breakup. "I wasn't going to take 18% of this company for seven people," Johnson told TIME in his first interview since the buyout offer. "If I'd known it was going to be in the newspapers, I would have said, 'Look, there's going...