This was my second time through one of Wall Street's most amazing stories. It's depiction of the Leveraged Buyout craze of the 1980's is a cautionary tale of greed that remains unheeded. An LBO is a financial transaction and process by which "a small group of senior executives, usually working with a Wall Street partner, proposes to buy its company from public shareholders, using massive amounts of borrowed money". Colorful Ross Johnson from my hometown of Winnipeg headed RJR Nabisco and recklessly sought to unlock the value he believed investors were overlooking in the company. This organization was the 19th largest company at the time with 140,000 employees and a host of impressive brands: Oreos, Ritz crackers, Life Savers, and Winston and Salem cigarettes. The eventual transaction ended up being the largest LBO ever reaching $17 billion in value (and huge heights of controversy).
Johnson could be a fictional invention. His rise in corporate power was built on political manoeuvring, extensive expense accounts, fleets of corporate jets (RJR Nabsico had 36 pilots and 10 planes), hobnobbing, and other excesses that make for entertaining (and these days incomprehensible) reading. His desire to eschew corporate tradition and civility is at odds with a traditional, depression upbringing. But Ross was his own man and showed early signs of being an entrepreneur and dealmaker. He was also big on the social scene being president of his fraternity, varsity basketball player, and a Cadet in Canadian military officer training at the University of Manitoba. The book is replete with examples of Ross' love of partying and the good life. At one time he was a member of over twenty country clubs and always seemed able to hit the links no matter what was going on.
The book reintroduces us to the firms and players that would personify a time when financial black magic took precedent over business basics like valuable products and solid customer service (not much has changed). In it are: Henry Kravis of Kohlberg Kravis; Salomon Brothers; Jim and Linda Robinson; Lazard Freres & Co.; Jeffrey "Mad Dog" Beck; Morgan Stanley; Drexel Burnham Lambert; Forstmann Little; Goldman Sachs; Shearson Lehman; and more. The majority of the book covers the feeding frenzy that ensued once the company was in play. Greed, petty jealousies, tantrums, egos, arrogance and ignorance are all in great supply. I enjoyed the side stories covering Ted Forstmann who hated Kohlberg Kravis and John Greeniaus who was one executive capable of actual management.
Burrough and Helyar place the reader in the boardroom, limo, and bar. The book is so well researched, the narrative so engaging, and the pace so lively that it reads like a novel. It continues to influence financial and business reporting by placing emphasis on the very real human foibles that impact those worlds. It made me a bit of a junkie for similar works as I went on to read others of this genre and era including: Den of Thieves, Predator's Ball, Rainmaker, amongst others.