Who are the real winners and losers in RJR Nabisco takeover

Most Of us looks at LOBO transactions from outs ide and score comp allowely different viewpoint how these transactions are d bingle. Barbarians at the entry presents a n insiders perspective. We somehow book these believe that when there is billions of dollars compound in transactions, Coos, investors, investment bankers make their decisions based on numbers, trying g to be objective to make rational decisions and very seldom let their subjectivity such as their ego to drive thee r decisions.However subsequently reading the book, I authorizedize how wrong we all are. This paper focuses on what the management police squad did wrong that cause them to fail and who are the real superiors from this transaction. wherefore management team confused When Ross Johnson proposed a levered buyout, he was incontest competent he would win. H e thought that Ors directors would give him the deference imputable a chief executive, never realizing that the b road would have no choice legally or morally but to treat him as an outsider.The following factors highlights why management team lost. Remaining Equity The carte tried to keep the company as unbroken as poss. able to minimize the negative effect on employees. However the management team planned to keep only t e tobacco personal credit line and sell the entire food business after the acquisition. Employees benefits Management rivet only on employees who would sat y and did not care roughly employees who would lose their jobs.Ross Johnson did a mistake during one of his interviews regarding potential layoff in the battle of Atlanta headquarters by saying those workers had port able jobs and could find calling elsewhere. Loosing boards trust Even though Johnson insisted that some portion in queue TTY would be divided among workers, only six names emerged anyhow his own. Too much for too few, this s what the directors thought, which shocked them. In the end, Ross Johnson lost the battle when he refuse d to guara ntee the benefits of those same workers.Choice of bankers and wishing of clarity. Choosing only one banker whom Ross Joe hones friend suggested was a big mistake. Ross Johnson did not have a clear overall approach and was cons sisterly following Shearers Salmons advises. Why KIRK won Clear strategy Recruit every significant fraud so that the other bidding group s would not be able to retain them and left the management-Shearers bidding group with only one available e player, Salomon Brothers, with significant access to capital market.Reading boards intellect holding its options open, KIRK did not disclose fully its Eng-term plans and tried consistently read the boards mind and to act based on it (for example, guar noted severance and other benefits for employees who would lose their jobs, or the announcement to Pl an to hire Paul Stitch as the chairman and CEO in order to mitigate the uncertainties regarding the business as, since he has been with company previously and showed due diligences in his position). Who are the real winner and losers?