Partially to rise to Midas’ challenge/threat not to recommend any more books until we monkeys step up and start doing the same, I offer my review of this classic, which I have just recently finished.
This is a book that has been on many a “Wall Street recommended reading list,” and for good reason. The RJR/Nabisco buyout stood as the single largestin American corporate history for 17 years, unmatched until the mega-boom of the early-mid 2000s. The circuslike glee with which the media of the time reported it would have made the Bronx Zoo 1977-78 Yankees jealous.
Even though a lot of us monkeys probably weren’t even born yet when it happened, “” still contains many of the elements that characterize any era of excess, greed, and ego—of which this real-life story had plenty. Every single major investment house was involved to some degree to get a piece of the action: , Shearson Lehman, , Drexel Burnham, Lynch, First Boston, , Forstmann Little, Salomon Brothers, and many more—an all-star cast if there ever was one.
The nearly 600-page book is thoroughly researched and has updated interviews with the major players who are still around. In an almost comically frosty manner, the Kravis of 2008 reiterates KKR’s difficulties in the aftermath of the deal, and we’re left with the impression that he probably wishes he had never done the deal in the first place.
A particularly fascinating aspect to me was that when the $31 billion deal (including just over $26 billion in cash) went through, the entire U.S. financial system was put on hold as the Fed had to wire the cash through in $1 billion increments, prevented by law from wiring anything more than that. For one deal! Unbelievable.
At the time (perhaps some of the older guys who were around then would like to weigh in?), this was the moral panic of the day. RJR/Nabisco CEO had a golden parachute of $53 million, which seems paltry in today’s numbers but pissed off a lot of people then. The $75 million fee KKR pocketed wasn’t a bad piece of change either.
The book does take a little while to get going, as the authors insist on taking readers through the history of each of the two most important companies in the deal. However, this gives us a picture of the kinds of personalities involved (such as a particularly illuminating story about Kravis and Roberts cleverly forcing Kohlberg out of the firm). The level of detail that the writers go into for the negotiations and valuations is astounding and gives readers insight into how these high-level tactics function. Sadly, having read more about today’s firms and their tactics, not much seems to have changed since then.
A vast, immersive journey that is part documentary, part novel, “Barbarians At the Gate” deserves its many recommendations. Read up, monkeys! You won’t regret it.
Monkey’s Review 1: Barbarians At the Gate
Monkey’s Review 2: The Financier
Monkey’s Review 3: Decision Points
Monkey’s Review 4: Debunkery
Monkey’s Review 5: When Genius Failed
Monkey’s Review 6: Monkey Business
Monkey’s Review 7: Death Of The Banker
Monkey’s Review 8: A Journey
Monkey’s Review 9: Damn It Feels Good To Be A Banker
Monkey’s Review 10: The Quants
Monkey’s Review 11: All About Hedge Funds
Monkey’s Review 12: The Unlikely Disciple
Monkey’s Review 13: Adventure Capitalist
Monkey’s Review 14: The Hedge Fund Book
Monkey’s Review 15: Investing In Hedge Fund of Funds
Monkey’s Review 16: Hilarity Ensues
Monkey’s Review 17: The Prince
Monkey’s Review 18: Markets Never Forget (But People Do)
Monkey’s Review 19: The Money Culture