Significant Events in the RJR Nabisco Takeover Battle With AM-RJR Nabisco Bjt
The Associated Press
Feb. 09, 1989
Undated (AP) _ Here are key events in the takeover struggle for RJR Nabisco Inc.:
-Oct. 20, 1988: RJR Nabisco announces that top managers led by chief executive F. Ross Johnson propose to buy the company for $75 a share in cash and securities or nearly $17 billion, using mostly borrowed money to be repaid with the company's earnings, assets or both, a transaction known as a leveraged buyout. The takeover would dwarf the previous record $13.4 billion paid for Gulf Corp. by Chevron Corp. in 1984. It also would come less than four years after tobacco maker R.J. Reynolds bought Nabisco Brands for nearly $5 billion.
-Oct. 24: Investment firm Kohlberg Kravis Roberts & Co., the leader in leveraged buyouts, offers $20.25 billion or $90 a share in cash and securities for RJR.
-Oct. 27: Salomon Brothers Inc. joins Shearson Lehman Hutton Inc. as the main backers of Johnson's group. At the same time, Kohlberg Kravis takes its bid directly to RJR shareholders with a tender offer for their stock.
-Nov. 2: Informal talks between the two competing bidders to undertake a joint takeover collapse, partly because of disputes on fees to be paid to the investment bankers.
-Nov. 4: Johnson's group raises its bid to $92 a share or $20.7 billion. Forstmann Little & Co., a buyout specialist that competes with Kohlberg Kravis, suggests it is interested in possibly bidding for the company as well.
-Nov. 7: RJR's committee of outside directors announces it will entertain bids for the company while pursuing other options, including a debt-financed restructuring.
-Nov. 16: ITT Corp.'s insurance subsidiaries, large holders of RJR corporate bonds, sue RJR and Johnson, claiming the leveraged buyout contemplated by management hurt the value of those bonds.
-Nov. 17: Forstmann Little says it won't bid for RJR. Metropolitan Life Insurance Co., another big RJR bondholder, files the second major lawsuit against Johnson and RJR.
-Nov. 18: The first deadline for submitting bids to the special RJR committee passes, and proposals are received from Johnson's group, Kohlberg Kravis and a late contender, First Boston Corp.
-Nov. 20: RJR special committee extends the auction until Nov. 29, saying the offers received were inadequate. It said Johnson offered $100 a share or $22.7 billion; Kohlberg Kravis offered $94 a share or $21.3 billion; and First Boston offerd a vague plan it valued as high as $118 a share or $26.8 billion.
-Nov. 28: In an interview published in Time magazine, his first public statement since the the takeover fight began, Johnson denies he undertook the leveraged buyout for personal enrichment, although he could make $100 million.
-Nov. 29: The second deadline for bids expires and all three bidders submit new offers worth at least $100 a share each. Late that night, the company announces a definitive merger agreement with Kohlberg Kravis at $109 a share, or $24.53 billion.
-Jan. 17, 1989: Kohlberg Kravis announces it has obtained commitments for the $14.5 billion in bank loans it needs to help finance the takeover.
-Feb. 3: The Federal Trade Commission approves the acquisition on the condition that Kohlberg Kravis sell lines of oriental foods, packaged nuts and ketchup produced by either RJR or Beatrice-Hunt-Wesson Inc., a Kohlberg Kravis unit.
-Feb. 9: The Kohlberg Kravis tender offer expires, and Kohlberg Kravis says it has been tendered approximately 96.8 percent of RJR Nabisco's common stock. Johnson resigns and J. Paul Sticht, a former chairman of RJR Industries Inc., is named acting chief executive.