Champagne Flows After KKR Takes Control of RJR Nabisco
NEW YORK — Kohlberg, Kravis, Roberts & Co. on Thursday took control of RJR Nabisco Inc. as the biggest corporate buyout in history flooded money markets with cash and credit transfers needed for the record $25-billion buyout.
Despite its huge cost--about twice the size of any other previous corporate transaction--the deal went smoothly, Wall Street sources and banking officials said.
About 150 people, representing KKR, its lenders, its four investment banking firms and legal advisers, crowded into a two-story conference room at Simpson Thacher & Bartlett, a New York law firm, to complete the deal.
Shortly after 10:30 a.m. EST, the transaction closed, and champagne was poured.
The guard changed quickly at the RJR Nabisco conglomerate, with F. Ross Johnson, the feisty chief executive who himself had attempted a takeover of the giant tobacco company, stepping down. J. Paul Sticht, a former R. J. Reynolds chairman, became temporary chief executive.
Sticht, 71, will take over as chief executive for the next 60 to 90 days. He was lured from retirement to take the post. He had been chairman of R. J. Reynolds until 1984.
His successor is being sought in what is being called the biggest corporate head hunt in history. Rumored to be in the running are Edward Horrigan, chairman of R. J. Reynolds Tobacco and the highest-ranking insider to stay, Kraft Inc. President Michael Miles and Beacham Group Chairman Robert Bauman.
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