Jeff Hirsh Read: April 2020
Inspiration: Why does everyone in finance seem to mention this book? What happened at RJR Nabisco?
Summary
Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.
“Barbarians at the Gate”, published in 1990 by authors and journalists Bryan Burrough and John Helyar, offers an account of the leveraged buyout (LBO) of RJR Nabisco in 1988, which at the time was the largest LBO in history. The book tells the story of the various parties involved in the takeover battle, including the management of RJR Nabisco, investment bankers, and private equity investors.
The story centers around the actions of F. Ross Johnson, the CEO of RJR Nabisco, who initially proposed a leveraged buyout of the company with the help of investment bank Shearson Lehman Hutton. However, a competing bid emerged from private equity firm KKR, setting off a bidding war between the two firms. The book details the machinations and maneuvering of the various parties as they sought to outmaneuver each other and secure control of the company.
In the end, KKR emerged victorious, completing the LBO and taking RJR Nabisco private. The book concludes with a discussion of the aftermath of the deal, including the impact on the company and its employees, as well as the larger implications for the world of finance.
Unedited Notes
Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.
***Disclaimer: notes taken before realizing I needed better notes
RJR-Nabisco takeover by KKR, bidding war with Ron Johnson (CEO), Kravis/Roberts, Fortsmann Little, tons of banks involved – constant one-upping, competing ideologies Led to bidding war for cash flow of tobacco business, conflict with employees/RJR roots About a lavish CEO, greed/ego of bankers that strip company of character through leverage
