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Barbarians at the Gate

Barbarians at the Gate

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Rating: 5 stars
Summary: Reads Like a Novel, Lots of Detail
Review: "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

Rating: 5 stars
Summary: A masterpiece
Review: "Barbarians at the Gate" is, quite simply, a masterpiece.

The book's "fly on the wall" narrative transports the reader into the hallowed corridors of Wall Street's most prestigious firms, and provides a close-up view on the dealings of its power brokers and financial elite. It is truly a thrilling experience.

The cast of characters includes outsized personalities like Henry Kravis, the LBO kingpin; Ross Johnson, the wise-cracking CEO of RJR Nabisco; Peter Cohen, the cigar-smoking chief of Shearson Lehman; and John Gutfreund, the fearsome head of Salomon Bros.

My only complaint is that Peter Cohen is portrayed unfairly. The authors paint him as a buffoon-like figure, unschooled in the ways of Wall Street and easy prey for the wily Henry Kravis. I find that image of him exceedingly difficult to believe. After all, this is the same Peter Cohen who won the admiration of Sandy Weill - one of Wall Street's savviest dealmakers - and rose to become his top lieutenant. That's quite a feat for a man reputed to be an ignoramus.

At any rate, this is a fabulous book - minor inconsistencies notwithstanding - and its place in the nonfiction business canon is assured.

Rating: 4 stars
Summary: Descriptive
Review: Barbarians provides a detailed look into the biggest LBO in history - RJR Nabisco. The author does any amazing job of describing the events, people, industry and money involved in this transaction. The author paints a perception of what drives men in the LBO industry - ethically and economically. He doesn't try to sway your opinion one way or the other. The chain of events, themselves, makes this book worth reading - no player in this transaction is left untouched. I recommend anyone interested in LBOs to pick and read this book. Tremondous insight into the LBO/power player industry

Rating: 5 stars
Summary: Excellent Work
Review: Based on exhaustive research, the authors have done a fantastic job putting it all together.

Rating: 4 stars
Summary: Huns on the Run
Review: 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.

Rating: 5 stars
Summary: Excellent read.
Review: Few business books have the entertainment, but at the same time, business education, value of this book. A definite must-read.

Rating: 5 stars
Summary: A Case Study of Greed in the 1980's
Review: For starters I would like to say that I saw the movie of the same title (several times - but I like James Garner) before I read the book. The movie is a comedy which successfully captures the spirit of this book, but this book is not a comedy.

The authors do an excellent job of developing the characters by telling how they rose to their respective positions at this focal point, and telling the story as it unfolds.

It is like all of the worst traits of humanity - greed, ego, pride, vanity, a hunger for power and conquest and victory - are played out in this true story of the LBO (Leveraged BuyOut) of RJR Nabisco. Companies being tossed around like commodities, while the little guy who works hard to make a living suffers.

This is the only book I have read on this subject to date. Some of the other reviewers have suggested other titles, and many of them are probably worth reading as well.

Five stars.

Rating: 4 stars
Summary: Unbeatable Reporting of the RJR Leveraged Buy Out
Review: If you want to understand Wall Street of the 1980's read this book, "Den of Thieves" by Stewart and "Predator's Ball" by Bruck. This book is an all encompassing depiction of the events that led to the first leveraged-buy out (meaning they used debt, in the form of massive loans, and not just equity or stock), the debut of KKR as a major financial power, and the emergence of "shareholder value" as a buzzword that no CEO will fail to keep in mind.

The authors were both Wall Street Journal reporters who wrote the book in much the same way as they would report- direct to the point, clearly explained, and with little detectable bias as to the fate of the major characters. I very much enjoy this style of writing, if every WSJ reporter were to write a book, I would be there to support them.

The book does a great job of explaining in detail the egregious excess of Nabisco during CEO Johnson's stint at the helm. In this day of clipped expense accounts and flying coach for business, the presence of a "Nabisco Air-Force" of jets and professional athletes and celebrities on the pay-roll is difficult to imagine. The authors do a good job of transitioning from these descriptions into the dirty details of how the deal was put together. The scenes where the transaction is coming together at the final hour, through all of the negotiations and threats, are well-told, I could actually feel the tension and angst in the room.

Read this book. When you're done with it go pick up "Den of Thieves" and "Predator's Ball."

Rating: 5 stars
Summary: Excellent Book!
Review: Inside the high stakes world of high finance, this book superbly portrays the happenings the events that led to the rise and eventual fall of two great American companies, RJR and Nabisco. Along the way, these companies inturn merger with other companies resulting in the cash spinning behemoth that became the prey of many corp finance predators of Wall St.

Both the authors excel at investgative journalism, wherein lies the beauty of this book. What you get from this book is a lucidly writen cases on a multitude of things. The making of the brand RJR Nabisco, from the turn of 20th to 21st century. The rise of the unstoppable buyout machine, KKR, the rise and fall of the leverage buyout (LBO) industry and the rise and fall of one man who spearheaded most of the fall of RJR Nabisco, Ross F Johnson. You end up learning more about many things that you thought were possible and the best part is, the narration style. Its like watching a good Hollywood movie, a fast paced thriller. So once you start the book you never want to put it down. And when you finish reading, you are left with a feeling of wanting more.

Rating: 5 stars
Summary: fascinating account of the 1980s merger mania
Review: It reads like a thriller. Once I started reading it, I couldn't put it down. It is the story of the RJR Nabisco buyout through the eyes of two journalists and it shows that a real world story can be just as dramatic as fiction. This book is one of the most important documentaries of the 1980s.


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