HISTORY OF THE RJR NABISCO TAKEOVER - New York Times

10/10/12 10:08 AM

HISTORY OF THE RJR NABISCO TAKEOVER

Following are the highlights of the most expensive takeover 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 $17 billion leveraged buyout at $75 a share. Oct. 24: Kohlberg, Kravis, Roberts & Company, Wall Street's leader in leveraged buyouts, tops the record bid with a $20.43 billion offer. Oct. 25: Shearson and Kohlberg, Kravis consider a combined bid. Oct. 26: Competition heats up as a joint deal is rejected. Oct. 27: Salomon Brothers joins Shearson as a backer in the management-led offer. Kolhberg, Kravis begins 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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HISTORY OF THE RJR NABISCO TAKEOVER - New York Times

10/10/12 10:08 AM

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 of promise. 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 the auction; 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,
http://www.nytimes.com/1988/12/02/business/history-of-the-rjr-nabisco-takeover.html Page 2 of 3

HISTORY OF THE RJR NABISCO TAKEOVER - New York Times

10/10/12 10:08 AM

Kravis claims victory for the staggering price of $24.88 billion, or $109 a share. Mr. Johnson's group char

http://www.nytimes.com/1988/12/02/business/history-of-the-rjr-nabisco-takeover.html

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