Barbarians at the Gate (78 page)

“Listen, even if we take a little less, a little bit of a haircut, I want to make sure Nabisco gets in with the appropriate company,” Johnson said. “It’ll give you and your guys a chance to be top banana.” Why, Johnson
and the Standard Brands Mafia had done it twice already. What an opportunity!

Greeniaus nodded a lot.

“I’m convinced I can do something that makes a hell of a lot of sense for you,” Johnson said. “For your people, John, you’re far, far ahead, because there’s many more paths of progress as part of a Kraft, a Philip Morris, a Nestlés, a Unilever, whoever it might be. Because they sure as hell don’t have the skills you have at Nabisco.”

Nabisco and Reynolds and Del Monte just didn’t belong together, Johnson said. They had nothing in common. No synergy. No flow of ideas or people back and forth. It just made sense to break them up. “You understand, don’t you, Johnny?”

Greeniaus nodded again, which Johnson took as agreement.

As the night wore on, Johnson talked to Greeniaus as if he were a member of the management team, confiding his innermost concerns about the upcoming bid. One hundred dollars a share was a hell of a bid, Johnson said: Don’t know if we can boost it.

“I’ve really got my doubts, Johnny,” he said. “I don’t know if we can go this high. They want a lot of cash. My biggest problem will be to try and hold my investors to the one hundred number. A short-term trader like John Gutfreund, you know, his attitude is the other guy is at ninety-four, ‘Why the hell should I come in at one hundred again, why shouldn’t we come in at ninety-seven or ninety-eight?’”

Even so, Johnson made it clear he wasn’t considering any bid much over $100 a share. From a financial point of view, it just didn’t make any sense. “Hell, we coughed up our goddamn toenails the first time around,” he said. “I haven’t seen anything that’s changed in the last ten days to enable us to bid any more.”

When the time came to leave, long past midnight, Greeniaus was immensely relieved. Not once, in more than five hours of conversation, had Johnson asked Greeniaus how he had been spending his time.

Later, the only words Johnson could remember Greeniaus uttering all evening were these: “Ross, I just pray you get it.”

“Gee, I don’t know,” Roberts said. “I’m trying to clear my mind of all this. I’m sick of talking about it.”

“Have you talked to Henry?”

“No, we’re intentionally not talking to each other.”

Roberts was a problem, Raether knew. He never had completely shared the rest of the firm’s ardor for RJR Nabisco. He seemed to pride himself on being the governor on Kravis’s engine. But in the battle for RJR Nabisco, Roberts had kept their speed so low they had finished last. Raether was worried whether Roberts would even make it to the starting line for the final round.

“I’m telling you, George, we can bid as high as the one-oh-five range and still get good returns,” Raether said.

But Roberts was being cagey. Raether couldn’t tell whether his message had any effect.

It was the Kravises’ second Thanksgiving at their new Vail home. Few places were better suited for a retreat. Two years earlier Kravis, while on a skiing vacation, had called his wife in New York and suggested they look for a chalet here. They both loved to ski so much, it only made sense. Kravis’s only condition was that he be able to ski in and out of the new house. Together they had tramped through home after home, never finding the perfect one. Finally they came on the right hillside, although the house atop it appeared to be a disaster—at least it looked that way from the outside. Kravis and Carolyne never actually went in, but simply bought it, tore it down, and had a new home designed in its place.

The result, a Tyrolean symphony of stone, wood, and glass, had been finished at Thanksgiving a year earlier. They named it Woodhaven. Kravis loved it. The house was surrounded by towering silver aspens, and the air smelled of pine. Inside, the living room was dominated by a massive seventeenth-century French hearth and twenty-four-foot arched windows overlooking the slopes. The library’s intricate paneling was of Hawaiian koa wood, hand tooled and rubbed by an Austrian-born artisan who spent months on the task.

Kravis had stopped talking about the deal the minute they arrived. Only once did Roehm bring it up. “What do you think you’re going to do?” she wondered.

“I don’t know,” Kravis replied.

Roehm again searched for clues in her husband’s face, but found none. “He was playing the great poker hand,” she said later. “He played it very close to the vest, even with me.”

On Thanksgiving they celebrated their third wedding anniversary. Carolyne gave Kravis a two-week-old black Labrador retriever. Actually, she gave him a picture of herself with the puppy in her arms. Kravis already had a yellow Lab named Kristi, which Roehm had given him for Christmas two years earlier.

“What are you going to name the dog?” one of Kravis’s children asked.

Kravis thought a moment. “If we end up bidding for RJR Nabisco, and if we win, his name’s going to be Nabisco. If we don’t get it, we’ll have to figure out another name.”

The kids weren’t too hot on Nabisco. “Why don’t we call him Oreo instead?” one suggested.

Kravis was on his way to the slopes Saturday morning when he returned a call from Paul Raether.

“Have you talked to George yet?” Raether wondered.

“No, have you?”

“Yeah, yesterday.”

“Where is he?”

“He’s not sure he wants to do this at all.”

“Where are you?” Kravis asked.

“Jeez, you know where I am,” Raether said. “I’ve always been more bullish on this than George.”

They debated for a while about how intransigent Roberts would be, and agreed to meet first thing Monday to plan their strategy. “You know George won’t want to leave till Monday morning,” Kravis reminded him. Roberts hated New York so much he tended to hang on to every last minute of California time. “We really ought to get together Monday night then,” Raether said.

Kravis won’t be there.

Kravis won’t be there.

Kravis won’t be back.

Through every back channel, from every Kravis investment banker and lawyer, the rumor spread. Relaxing in Connecticut, Jim and Linda Robinson heard it and recalled Linda’s strange conversation with Kravis. In the Hamptons, Peter Cohen heard it and thought of his talk with Dick Beattie. In his home on the north shore of Long Island, Tom Hill heard it and thought of his own discussions with Bruce Wasserstein. The rumor spread to each of the Salomon Sausages and through the ranks at Lazard and Dillon Read. In Florida, Johnson heard it from Linda Robinson. All of them heard the same thing. Kravis was bidding low if he was bidding at all.

The question was: Would they believe it?

Seslowe had penciled in the British company for $100 million of the $1.2 billion in equity First Boston needed. Saturday the group’s tax attorneys ruled that, of the $250 million in equity required for buying Nabisco itself, at least half must come from a third party unaffiliated with the Pritzkers or First Boston. Seslowe immediately thought of Berisford.

Two of the British company’s senior executives were in New York, but no one could find them. Seslowe phoned Berisford’s chief financial officer in London, who reminded the accountant why he couldn’t locate the men. They were orthodox Jews. They couldn’t work on the sabbath, or even answer the phone. Seslowe waited all day. Shortly after sunset, he took a call from Howard Zuckerman, head of Berisford’s U.S. operations.

“Howard, we need a commitment within two days.”

“If it’s so important,” Zuckerman replied, “how about meeting tonight?”

Wonderful, Seslowe said. Come on over.

Fennebresque greeted the two Berisford executives when they arrived at First Boston that evening. Ushering them into a conference room, he thought he heard a young First Boston associate softly whistling. Fennebresque turned and looked at Berisford’s chairman, Ephraim Margulies, and immediately recognized the tune. It was the theme from Alfred Hitchcock’s 1950s television show. Margulies was the spitting image of the renowned British director.

Fennebresque’s food team made a forty-five-minute presentation. Afterward Maher’s aide was pleased; he thought the odds good that the Berisford people could make their decision by Tuesday. Twenty minutes later, Howard Zuckerman took Fennebresque aside.

“We’ll do it.”

Fennebresque didn’t understand. “You’ll do what?”

“We’ll take the $125 million.”

Fennebresque watched in disbelief as Zuckerman picked up a discarded pizza box and, on its rear flap, scribbled out a wire authorizing Berisford’s London office to make the investment. He had never seen anyone work so fast.