Well written and researched account of the takeover of tobacco/biscuit giant RJR Nabisco by the private equity group KKR. At the time, this was by far the largest leveraged buyout (LBO) in history, and in inflation-adjusted terms it still is. The takeover was bitterly-contested, with three groups vying for ownership of the company -- including one led by the CEO Ross Johnson, who put the company "in play" in the first place. It received huge media attention and became a symbol for the greed and excess that came of age in Wall Street during the 80s.
Henry Kravis of KKR is pretty close to a real-life Gordon Gekko, though he doesn't come across as any less likeable than most of the players involved. Particularly detestable are the parasitic investment bankers who, driven by the prospect of huge fees, were desperate to make a deal happen and get a piece of the action.
The character that disgusted me the most in the whole affair was Nabisco CEO Ross Johnson. Investment bankers and lawyers are despicable by nature: it's what they do. But here was a guy charged with running a venerable company (or, more accurately, a group of companies following a series of mergers/takeovers). And from the word go he basically treats it like a fun park. You don't need to go past the obscenely extravagant fleet of private jets and purpose-built hangar to see that his priority was living it up and boosting his ego on the company tab. To top it all off he instigates an LBO --- for no better reason, according to the writers, than because he was a "man of action" who couldn't leave well enough alone --- in which he attempts to enrich himself and his cronies with obscene golden parachutes. In the process, of course, he destroys a group of companies that have been built up over generations. It's hard to find anything to respect about such a character, and you can't help thinking that without cretins like this at the helm of large corporations, the damage that could be inflicted by the piranhas on Wall Street would be severely limited.
Anyhow, it's a great (though at 600-odd pages a rather lengthy) read for anyone who enjoys good finance writing.
Henry Kravis of KKR is pretty close to a real-life Gordon Gekko, though he doesn't come across as any less likeable than most of the players involved. Particularly detestable are the parasitic investment bankers who, driven by the prospect of huge fees, were desperate to make a deal happen and get a piece of the action.
The character that disgusted me the most in the whole affair was Nabisco CEO Ross Johnson. Investment bankers and lawyers are despicable by nature: it's what they do. But here was a guy charged with running a venerable company (or, more accurately, a group of companies following a series of mergers/takeovers). And from the word go he basically treats it like a fun park. You don't need to go past the obscenely extravagant fleet of private jets and purpose-built hangar to see that his priority was living it up and boosting his ego on the company tab. To top it all off he instigates an LBO --- for no better reason, according to the writers, than because he was a "man of action" who couldn't leave well enough alone --- in which he attempts to enrich himself and his cronies with obscene golden parachutes. In the process, of course, he destroys a group of companies that have been built up over generations. It's hard to find anything to respect about such a character, and you can't help thinking that without cretins like this at the helm of large corporations, the damage that could be inflicted by the piranhas on Wall Street would be severely limited.
Anyhow, it's a great (though at 600-odd pages a rather lengthy) read for anyone who enjoys good finance writing.
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