Barbarians at the Gate: The Fall of RJR Nabisco

by Bryan Burrough

In the end, then, perception was the issue. Perception about who was running a set of bond offerings that, to Johnson or any other acquirer, was a detail. For despite its status as a full partner in Johnson’s deal, despite all the high talk about merchant banking, Salomon’s principal mission wasn’t owning Oreos. It was selling bonds. And it was willing to sacrifice Johnson’s interests—indeed, his entire deal—to avoid the perception that it was taking a backseat to its hated rival, Drexel. Through all the machismo, through all the greed, through all the discussion of shareholder values, it all came down to this: John Gutfreund and Tom Strauss were prepared to scrap the largest takeover of all time because their firm’s name would go on the right side, not the left side, of a tombstone advertisement buried among the stock tables at the back of The Wall Street Journal and The New York Times.