Word: sharings
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Dates: during 1980-1989
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Much of Wall Street and corporate America saw the board's choice of KKR as a repudiation of Johnson, who had become a symbol of executive greed after first proposing to buy out RJR (1987 sales: $15.8 billion) for $75 a share. Company directors were outraged when they read accounts, leaked by insiders, of how much Johnson and his seven colleagues planned to rake in from the deal: as much as $2.6 billion. Though Johnson later insisted he had planned to share the potential gains with 15,000 RJR employees, the battle lines were clearly drawn -- not just between Johnson...
...Kravis and his cousin George Roberts, 45, made its own bid, and so did a team composed of the First Boston investment firm and Chicago's billionaire Pritzker family. The Pritzkers topped the first round of bidding with a preliminary offer of $27 billion, or about $118 a share for RJR stock that had traded for just $56 on the eve of the battle. The Johnson group boosted its offer to $100 a share while KKR bid $94, a price that seemed to indicate that the firm might drop out. The RJR board then extended the contest until...
...close touch with their team in New York City as it prepared the final attack. When the directors met last week on the 35th floor of a midtown Manhattan skyscraper to open the final bids, they found that Kravis and Roberts had pumped their offer up to $106 a share, while the apparently complacent Johnson group bid only $101. A board adviser also noted that "KKR had the sounder financial structure." The First Boston team, meanwhile, withdrew from the competition after failing to demonstrate that it could finance...
...were "astounded" that the directors "would go off into the middle of the night to negotiate." Hugel explained that the KKR bid simply was much higher. By 2 a.m., however, Johnson's advisers persuaded him that his chances were still alive. Armed with a new bid for $108 a share, Johnson arrived the next morning at the East Side law offices where the special, bid-selecting panel of five directors was meeting. He demanded to present his proposal...
Lawyers for the board gave Johnson and his small coterie of advisers 15 minutes to sweeten the latest offer. At about 1:15 p.m. on Nov. 30, Johnson, chain smoking, submitted a bid of $112 a share and then settled into a tiny % office to await the verdict. The directors still favored Kravis. "KKR was going to have to sell fewer businesses," a source close to the board said, "and there was more protection for RJR employees under the KKR offer." Moreover, the informant added, while the Johnson group said it would reduce its initial stake in RJR after...