Biafra's Reviews > Barbarians at the Gate: The Fall of RJR Nabisco

Barbarians at the Gate by Bryan Burrough
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Jun 08, 2014

it was amazing
bookshelves: finished_2014, written_review

The tale of Ross Johnson, the CEO of RJR Nabisco who sets the book's plot into motion, and the frenzied time leading up to the final decision on who'll win the leveraged buy out (LBO) bid and take ownership of RJR Nabisco is fascinating. The authors do an excellent job of providing background for the many people involved in the final bids, much of which is crucial for understanding their motivations and decisions.

For example, the rise of Johnson through the ranks of Standard Brands, the late night drinking brainstorming sessions he has with those whom have risen with him, and his constant need to have change going on around him provide adequate background to explain his somewhat puzzling decision to think up and execute the idea of a LBO of RJR Nabisco: essentially the share price isn't where he wants it and he thinks RJR Nabisco is becoming staid.

The resulting frenzy of action unleashed by the (at the time) largest LBO in history, from Henry Kravis's (whom Johnson originally talked to about the LBO) wheeling and dealing to scrap together the money to enter the LBO bid to the surprise introduction of First Boston and their off-the-wall strategy to make a deal happen, kept the story going at a good pace and the authors did a nice job of flipping between different storylines to keep things from going stale.

The book also give a great idea of how much the personalities of those involved in the business deal affect the decisions made. For example, Ted Forstmann's hatred of junk bonds caused trouble as others sought to use these as collateral for the LBO while the involvement of Bruce Wasserstein, formerly of First Boston, helped spur First Boston to make a bid.

In addition, it provides an overview of different financial devices---junk bonds, securities, and others---that one hears on the news but are not commonly put into context of how they are normally used.

Overall, an excellent journalistic endeavor and a non-stop thrill from start to finish. The authors give a highly detailed account of the players' backgrounds and motivations along with enough detail about the events to paint a good picture of events. Even better, they refrain from passing their own judgement during the book, which help the reader draw their own conclusions and allows one to understand (to a degree) why particular decisions were made without pre-conceived biases.

Highly recommended.
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