Barbarians at the Gates: The Fall of RJR Nabisco

Barbarians at the Gates: The Fall of RJR Nabisco by Bryan Burrough and John Helyar is a book about the biggest LBO of all times, the RJR Nabisco in 1988 for a sum of $ 25 million. This was an event which shook the stock market for 2 months and created liquidity concerns in the market.

The drama starts when Ross Johnson (RJ), CEO of RJR Nabisco launched the LBO in order to increase the share of price of the company. This was thought to be a single bid affair due the enormous size of the transaction and because of the nature in which the company was run by Ross and his team. But Henry Kravis, Senior Partner, Kohlberg Kravis Roberts & Co. (KKR) launched a bid against RJ’s team and in course of time other investment banks also joined the bandwagon. What followed was a fierce battle between the groups fought over rounds of meetings, biddings, interrogations and ever-escalating bids. Finally, KKR won the war even though RJ’s group placed a higher bid as doubts were cast over RJ group’s junk bonds.

About authors

Bryan Burrough is a reporter for the Wall Street Journal in New York. In 1987 he won the John Hancock Award for Excellence in Business and Financial Journalism. John Helyar worked for the Wall Street Journal for nine years. He is now a senior editor of Southpoint, a business magazine based in Atlanta, Georgia.

Positives

The book is arranged in good volumes about the company itself, how it was formed and about the CEO Ross Johnson giving the reader a good background of the company and the main characters involved.

Authors have presented a detailed account of all the events that happened involving all the concerned parties. How the meetings happened and what transpired in these meetings has been written in a well formulated manner.

Book is a good account of how investment banking, the corporate world, corporate boards, and sophisticated financial instrument operate. Having said this, all of this has been done without getting into un-necessary financial details which would have bogged down the reader.

Negatives

Having said this, it should be mentioned that in the early part of the book, many details seem to be un-necessary. Such as details have been mentioned about the lavishness of RJR executives, personal accounts of some of the not-so-important players could have been eliminated.

Also, a large number of characters have been mentioned which at times confused me and I had to turn few pages to recollect about the same. Also since this is a book about something which happened way back in 1988, authors could have taken a few more efforts to include something on how the company was dealt with afterwards and how KKR came out of it.

Verdict

All in all, I would recommend this book to all the book lovers, even if you like fiction, as the way in which this book is written it takes you in that era and you know all about all the main characters involved and what they might be thinking. If you are interested in reading about corporate battles this book simply grips you. This book is a great business book of all times.

I bought it from flipkart.com because they deliver to your doorstep free of cost and on this book I also got 18% discount.

Happy reading and let me know how did you like it.

Book Review by Praveen Bajaj