Barbarians at the Gate

This book is a description of the largest leveraged-buy out of the 80's. The book covers the management buy out of RJR and all the financial moves that took place to get it done. It covers the winners and losers and the tactics they used. The authors are investigative reports so they have the ability to provide the reader with a very well constructed and easy to understand story. They really bring the reader into the negotiations and all the high pressure and tension is coved to the reader. The most fun was when the authors took to describing all the financial players involved, their egos and ways of life and doing business. The excesses of some of the companies detailed are really something. If you are interested in this topic then I would suggest you also read "Den of Thieves" and "Predator's Ball", both of which cover the 80's M & A and Junk Bond world. To get a better understanding of KKR, I would suggest "Masters of Debit" and if you are looking for more info on this particular deal I would suggest "True Greed".

The dot-com stock market insanity of 1999, followed by the dot-bomb fall in 2000, is eerily mirrored in this book from a decade earlier about big money, big egos, and raging insanity.Burroughs and Helyar tell the story of the leveraged buyout of RJR Nabisco in gripping fashion, showing how greed and shortsightedness contributed to the biggest and worst-managed corporate takeover in history. The players: Salesman F. Ross Johnson of RJR vs. Henry Kravitz of KKR. Everything from a wild, rip-roaring potboiler novel is here: Secret deals, stock market manipulation, flouting of laws, surprise plot twists. All of it almost unbelievable, but all of it true.The next time you wonder about how people could have been taken in by internet companies with insane stock prices who blew through venture capital as if it were funny money, read this book. It's well worth your time, effort, and energy.

I am a management consultant who works with companies that are interested in improving stock price, and I know many of the more humble people portrayed in BARBARIANS AT THE GATE. I would like to put this book into perspective for you. 20 years ago our firm did a survey of CEOs and found that 99 percent felt that trying to improve stock price was unethical and immoral, and involved doing manipulative things. After the takeover wars of the 1980s, most CEOs believed that improving stock price was an important task and could be done in an ethical way. There is nothing more disruptive to a company than to go through a hostile takeover, whether the bid succeeds or not. Raw greed and lust for power hold sway at such times, and many people will pay the price for having attracted the sharks into their swimming pool. Prior to the RJR Nabisco purchase by KKR, many large companies felt safe because of their size. They were suffering from "stalled" thinking, because it was widely believed that a deal of this sort could not be financed with debt at the time the takeover occurred. That was wrong: For a price, the money is always there. For those who have not been in these bruising ego battles, what you will not realize is that these contests are a lot like those you will remember from grade school on the playground when the teachers were not around. Bullying, threats, and naked power carry the day in a lot of situations. But because this is about ego, a lot of mistakes are made. RJR Nabisco continued to strain under mountains of debt for years, even after lots of refinancings because of the LBO. KKR's track record looks a lot different now than it did before buying RJR Nabisco. A lot of the fever behind the LBO's is gone, for now. Bring back a bear market for a few years, and this whole phenomena will recur. Some smart lawyer will find a way around the defenses that so many rely on for now. The only ultimate defense against the circling sharks is to have a high-priced multiple stock. That is the only timeless lesson for companies. If you are wondering how accurate this book is, it is more right than wrong. The authors did, however, miss some of the most intriguing ironies of the situation. Perhaps someday, someone with inside knowledge will write the sequel or unveil the whole, delicious irony. That should be a great story that will outsell GONE WITH THE WIND.With the benefit of this context, I do recommend you read the book. You'll find it stranger than fiction in many ways, and very exciting to watch. The authors have captured the emotion of the moment very well. It's a whale of a story.