Will His Deal Go Up in Smoke?

Ross Johnson's grab for RJR Nabisco infuriates his board

When Ross Johnson, president of RJR Nabisco, proposed last month that the tobacco-and-food conglomerate he had helped assemble only three years earlier be "put into play" and broken up, he had reason to believe that the company's board of directors would support him. After all, he had treated the outside directors on RJR's board well, paying them lavish fees and providing access to the company's corporate jets. Moreover, his offer was the largest leveraged-buyout bid in history and would give RJR's stockholders a rich, immediate payout.

Johnson, 56, may have grossly miscalculated. When he announced during an Oct. 19 dinner at...

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