Word: rjr
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Dates: during 1980-1989
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...than abject short-term greed; still, buyouts are popular among today's large-scale financiers, people who are no longer innovative entrepreneurs who build companies from scratch, but tricky accountants who raise dividends any way they can. Now, following the example of Ross Johnson, the chief executive officer of RJR who tried to take over the company for himself, they don't work for the stockholders--they work for themselves...
...million it invested in KKR's takeover fund, but being in the interesting position of helping raid a company they own stock in, they will get huge returns from those holdings when the new owners sell off parts. The closing of the takeover deal earlier this month meant that RJR stock was worth $109 per share--quite a bit more than than the $56 per share it was worth on the market before the highly-publicized takeover war began, but that's the magic of buyouts...
...university can be? Not only did Harvard devote endowment funds to an ethically questionable, not to mention financially risky, hostile takeover for no other purpose than to quickly turn a profit, but they did it over a company in which they were a major shareholder. This same company, RJR-Nabisco, has not only received harsh criticism and censure for agressive and unethical business practices in many Asian and Third World nations but is also the fourth largest investor in the apartheid state of South Africa...
Harvard contended that it did not have any control over the decision of KKR to take over RJR and claimed that it could not back out of the deal. The Commonwealth of Massachussetts pension fund, which had also originally committed funds to KKR's limited partnership, pulled out because it did not approve of the hostile takeover process or RJR's connections to South Africa. Harvard's administrators, however, saw nothing wrong with donating University resources to this scheme...
Analysts agree that leveraged buyouts serve no one but the dealmakers. Professor Robert Reich at the Kennedy School has said of the RJR takeover that it "clearly exposes the greed and rapaciousness of so many of these takeovers." As the University is run more and more like a corporation, it seems to be losing--no matter how much its administrators protest--its moral purpose, so that the only standards in visible practice are those dictated by the University's own greed...