History of the Rjr Nabisco Takeover - New York Times

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10/10/12 10:08 AMHISTORY OF THE RJR NABISCO TAKEOVER - New York Times

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HISTORY OF THE RJR NABISCO

TAKEOVER

Following are the highlights of the most expensivetakeover battle in history waged for RJR Nabisco, the food

and tobacco giant that is the nation's 19th-largest industrial

concern. Oct. 20, 1988: An investment group led by F. Ross

Johnson, Nabisco's chief executive, in partnership with the

Wall Street firm Shearson Lehman Hutton, proposes a $17billion leveraged buyout at $75 a share. Oct. 24: Kohlberg,

Kravis, Roberts & Company, Wall Street's leader in lever-

aged buyouts, tops the record bid with a $20.43 billion of-

fer. Oct. 25: Shearson and Kohlberg, Kravis consider a com-

bined bid. Oct. 26: Competition heats up as a joint deal isrejected. Oct. 27: Salomon Brothers joins Shearson as a

backer in the management-led offer. Kolhberg, Kravis be-

gins its tender offer for $90 a share. Oct. 28: RJR Nabisco

agrees to give Kolberg, Kravis confidential financial data

about its operations. Nov. 1: RJR's chairman, Charles E.Hugel, said it is highly likely that the company will be

sold. Stock rises $1.25, to $85 a share. Several Kohlberg,

Kravis investors balk at allowing the firm to use their cash

in a RJR Nabisco buyout because of a possible hostile

takeover and because of RJR Nabisco's ties to South Africa.

Nov. 2: The two suitors tentatively agree to join forces.


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Nov. 3: The agreement fails; Mr. Johnson's group raises the

stakes with a $92-a-share counteroffer of $20.9 billion. Nov.

4: Forstmann Little indicates it might join the battle with a

higher bid. Shearson accuses Forstmann of breach ofpromise. Nov. 8: RJR Nabisco discloses formal rules for its

sale, indicates it might sell its food divisions on its own

and sets Nov. 18 as a deadline for bids. Nov. 11: Kohlberg,

Kravis extends its tender offer by 10 days, to Dec. 5. Nov.

16: Field narrows as Forstmann Little declines to enter theauction; RJR Nabisco's stock tumbles $4.50, to $84. ITT,

which holds RJR Nabisco bonds, sues RJR Nabisco and Mr.

Johnson over the decline in the bonds' value. Nov. 18: RJR

Nabisco management and Kohlberg, Kravis deliver bids

before the 5 P.M. deadline of $22.7 billion and $21.3 billion,

respectively. A surprise tentative offer of $23.8 billion to

$26.8 billion comes from group led by First Boston, which

is aligned with the Pritzker family of Chicago. Financing

for that offer is uncertain. Nov. 19: Potential buyers spend

the day explaining their complex bids to the company.

Nov. 20: Special committee running the auction announces

a new deadline, Nov. 29., for reformulated proposals. Nov.

29: Three suitors submit final bids of more than $100 a

share. Management offers $22.9 billion, Kohlberg, Kravis

offers $24 billion and First Boston offers $23.38 to $26.11.

Stock price jumps $1.875, to $90.875. Nov. 30: Kohlberg,


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Kravis claims victory for the staggering price of $24.88 bil-

lion, or $109 a share. Mr. Johnson's group char

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History of the Rjr Nabisco Takeover - New York Times