Ross Johnson climbs his way out of Standard Brands in Canada to ascend to the top of Nabisco, which then merges with R.J. Reynolds to form RJR Nabisco. He is extravagant and over the top. The company pays for a fleet of corporate jets (the "RJR Air Force"), golf outings, and a roster of celebrity athletes on retainer.
Johnson is obsessed with the company's share price, which he feels the market has undervalued because of tobacco litigation risk, and decides to act on it. He gets drawn into pursuing a leveraged buyout, partly by advisors who stand to profit from it and partly by the prospect of an enormous personal windfall. He forms a management group and bids $75 a share.
The bid turns out to be far too cheap, and it looks to the board as though management is trying to buy the company out from under its own shareholders. That opens the door to competitors. Johnson's group is backed by Shearson Lehman Hutton and American Express; against them come KKR with Drexel and Merrill, First Boston with a tax-driven structure, and Forstmann Little, which drops out early.
Through a long stretch of due diligence and infighting, the bidders discover how much fat there is to cut at RJR Nabisco, which lets each side justify raising its price well above the opening bid. In the end KKR wins, at roughly $109 a share, about $25 billion, the largest LBO ever done at the time. Johnson walks away with a large golden parachute and a badly damaged reputation.