Barbarians at the Gate: The Fall of RJR Nabisco [Paperback]

Bryan Burrough (Author), John Helyar (Author)

Book Description

Release date: December 1, 2009

“One of the finest, most compelling accounts of what happened to corporate America and Wall Street in the 1980’s.”
—New York Times Book Review

A #1 New York Times bestseller and arguably the best business narrative ever written, Barbarians at the Gate is the classic account of the fall of RJR Nabisco. An enduring masterpiece of investigative journalism by Bryan Burrough and John Helyar, it includes a new afterword by the authors that brings this remarkable story of greed and double-dealings up to date twenty years after the famed deal. The Los Angeles Times calls Barbarians at the Gate, “Superlative.” The Chicago Tribune raves, “It’s hard to imagine a better story...and it’s hard to imagine a better account.” And in an era of spectacular business crashes and federal bailouts, it still stands as a valuable cautionary tale that must be heeded.

Editorial Reviews

From Library Journal

The leveraged buyout of the RJR Nabisco Corporation for $25 billion is a landmark in American business history, a story of avarice on an epic scale. Two versions of the fierce competition for the largest buyout ever consummated are presented by skilled journalists with contrasting styles. Burrough and Helyar are clearly fascinated with the personalities of the players in the deal and with the trappings of corporate wealth. The restless, flamboyant personality of Ross Johnson, CEO of RJR Nabisco, is portrayed as the key to the events that were to unfold. The colorful description of all of the players and the events will likely have broad appeal. Lampert signals the complexity of her story by introducing her narrative with a three-page cast of characters. Her focus on the strategy of the players and on the fast-paced action provides a more concise description of a deal big enough to augment the wealth of many rich people. Business libraries will want both versions of this story of capitalism drawn to the extreme, but students, looking for a more comprehensive treatment, will favor Lampert's version.
- Joseph Barth, U.S. Military Acad. Lib., West Point, N.Y.
Copyright 1990 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

Review

“It’s hard to imagine a better story...and it’s hard to imagine a better account” (Chicago Tribune )

“A superlative book...steadily builds suspense until the very end.” (Los Angeles Times Book Review )

“The fascinating inside story of the largest corporate takeover in American history… It reads like a novel.” (Today Show )

“The most piercing and compelling narrative of a deal to date.” (Boston Globe )

“Impressive qualities... delicious scenes... a cinematic yet extraordinarily careful book.” (Ken Auletta, New York Daily News )

See all Editorial Reviews

Product Details

• Paperback: 624 pages
• Publisher: HarperBusiness; Reprint edition (December 1, 2009)
• Language: English
• ISBN-10: 0061655554
• ISBN-13: 978-0061655555
• Product Dimensions: 8 x 5.3 x 1.5 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.6 out of 5 stars  See all reviews (131 customer reviews)
• Amazon Best Sellers Rank: #8,645 in Books (See Top 100 in Books)
  • #2 in Books > Business & Investing > Management & Leadership > Consolidation & Merger
  • #29 in Books > Business & Investing > Biography & History > Company Profiles

Most Helpful Customer Reviews

68 of 71 people found the following review helpful

4.0 out of 5 stars Huns on the Run July 21, 2003

By john purcell

Format:Paperback|Amazon Verified Purchase

Burrough and Helyar are two former Wall Street Journal reporters who present a comprehensive telling of the battle for control of RJR Nabisco, ultimately won by KKR, led by Henry Kravis in 1988. The book was written in 1990 and provided the final chapter on the LBO excesses of the 1980's. By 1990, the stock market rally had made LBO's less attractive and some of the earlier deals were already starting to unravel and collapse under the weight of the debt payments, as predicted by long-time junk bond critic and rival RJR Nabisco bidder Ted Forstmann.

There are some criticisms of this book. The authors, despite their finanical backgrounds, seem to prefer story-telling to financial details. Hence, they have written a tale of personalities, with an especial interest in Ross Johnson and Henry Kravis, to the detriment of really explaining the financial and business details. The reader can learn intricate details about Johnson and the Wall Streeters preferences in cars, apartments, drinks, wives, schoos, etc. The authors seem to think we need a biographic account of all minor players, starting with their grade-school years, and the end result is 528 pages and still minimal financial explanation.

The other main criticism here, reading this now, is how dated the material has become. The authors would do well to provide some new material on how the deal has worked out. From other sources, I learned that KKR renegotiated the deal in the early 1990's (the resets were nearly toxic after all) and sold out their position entirely in 1995, more or less breaking even, depending on whose numbers you use.

The story of the final bids and the final final bids is truly riveting and meticulously researched here.... The Johnson group ultimately presents a bid that is slightly higher than the KKR bid, but the board discounts the Johnson bid since it does not guarantee the bond pricing, and calls the whole thing a tie, much like the 2000 election. At that point, the Board accepts the KKR bid, for non-economic reasons, mostly bad publicity related to Johnson's greed. Ironically, Johnson had already given up much of his payout in order to boost the total value of the bid to the shareholders. Read more ›

58 of 64 people found the following review helpful

5.0 out of 5 stars Giant Egos Clash at the Top April 25, 2000

By Donald Mitchell HALL OF FAMETOP 100 REVIEWERVINE™ VOICE

Format:Paperback

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. Read more ›

36 of 41 people found the following review helpful

5.0 out of 5 stars Big Money Insanity June 25, 2001

By Kimberly Murphy-Smith

Format:Paperback

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.

14 of 14 people found the following review helpful

5.0 out of 5 stars Reads Like a Novel, Lots of Detail September 6, 2001

By Greg Feirman

Format:Paperback

"Barbarians at the Gate" is a very easy, fun read. It is purposefully written alot like a novel. For one thing, the book shifts frequently between different times and places. For instance, the prologue details the board meeting where CEO Ross Johnson proposes a Leveraged Buy Out (LBO) for the first time. The start of chapter 7, page 184, then picks up from there chronologically, "Johnson rose early the next morning, the memory of Wednesday night's board meeting still fresh in his mind" (pg 184). Also like a novel, the authors give a tremendous amount of background and personal history on the people and companies involved in the deal. There is history about Ross Johnson's personal history, about his time at Standard Brands and Nabisco before the merger with RJR, and then about RJR the company, dating back to the 1800s. There is also a chapter that goes into some detail about KKR and Henry Kravis. All of the information was interesting and well written, though I felt at times like I just wanted to get back to the main plot and away from some of these tangenital details. It was a choice the authors made between making the book more journalistic and conise or more like a novel, and I guess I ended up liking their choice.
The heart of the book is the bidding battle for RJR between KKR and the Shearson Lehman Group (which had Johnson on their side); First Boston also makes a bid but I don't think their bid was ever seriously, seriously considered. The authors describe an LBO as follows, "A firm such as Kohlberg Kravis, working with a company's management, buys the company using money raised from BANKS and the PUBLIC SALE OF SECURITIES; the DEBT IS PAID DOWN WITH CASH FROM THE COMPANY'S OPERATIONS and, often, by SELLING PIECES OF THE BUSINESS" (pg 101).... So that is how KKR and the LBOs work. The book takes you through the day by day strategy sessions of the different groups, their attempts to raise financing (equity from private investors, junk bonds issued by the investment banks, and commercial bank loans), their responses to moves from the other side, the meetings of the Special Comittee which would decide which bid to accept, etc.... There are alot of late nights, alot of re-crunching the numbers, alot of personality clashes, lawyers, investment bankers, and more. The writing was so good that it made me feel like I was there, following the deal step by step, and gaining an understanding of what the various parties do and what goes on in an LBO. It was like reading a story and learning about LBOs and how big deals get made at the same time. Very rewarding. I usually don't like books to be this long (515 pgs) but in this case I think almost every pages was worth it.
Greg Feirman Read more ›