Barbarians at the Gate: The Fall of RJR Nabisco.

• Author: Hamilton, David P.

Barbarians at the Gate: The Fall of RJR Nabisco.

Bryan Burrough, John Helyar. Harper & Row, $22.50. Is the spate of takeovers and LBOs really Adam Smith's invisible hand in action? Should management take as its primary goal the task of increasing the trading value of the company's stock? If so, is it worth the resulting financial convulsions involved in assuming billions of dollars in debt, slashing R&D expenditures, and often laying off hundreds or thousands of employees?

Answers to these and related questions will have to wait, at least as far as Bryan Burrough and John Helyar are concerned. Barbarians at the Gate, a fast-paced account of the intricate financial deal-making and breaking in the record-shattering $25 billion sale of RJR Nabisco, never really examines serious issues, although it succeeds admirably in depicting the Wall Street culture of investment bankers and lawyers who grow fat on the consulting fees generated by takeover deals. Larger-than-life figures - everyone from the flamboyant, frat-boyish CEO F. Ross Johnson to the tightly controlled and publicity-shy Henry Kravis - are painted in broad, often unflattering strokes against a background of extravagant corporate luxury.

As fiction, the basic storyline would be unsettling enough; presented as fact, it's downright ominous. Johnson and his management group, worried by the fact that their stock is undervalued at $55 a share, propose an LBO at $75 to the company's board of directors. Unswayed by Johnson's veiled bribe - an offer of post-LBO directorship seats and the opportunity to watch their own stock holdings grow as much as four-fold - members of an independent board appointed to evaluate the offer issue a press release instead of keeping the deal quiet until the last moment. Kravis, always on the lookout for a high-profile deal to hang his name on, preempts Johnson's bid with a $90 tender offer. Confusion reigns. Third parties come and go, unable to obtain credible financing. Johnson and Kravis strike a deal, only to see it unravel over seemingly minor disputes. A second management bid of $100 is derailed by a long shot from an outside group led by First Boston, which loses out in a subsequent bidding round. Finally, in protracted overnight negotiations, the board decides to sell to Kravis for $109, rejecting a $112 management bid because of concerns about its underlying financial assumptions.

Gripping stuff, right? Unfortunately, I don't know how much of it to...