Barbarians at the Gate (55 page)

It was all about egos, Linda Robinson knew. She considered herself finely attuned to the ways of her swaggering Wall Street clients. As so often happened, Peter Cohen and Tommy Strauss and Henry Kravis and the rest had totally lost sight of their real objective, RJR Nabisco. Their disagreements had nothing to do with shareholder values or fiduciary duties. It was all a test of wills among an intensely competitive clique of macho, Park Avenue bullies in pinstripes. At this point, she was well aware, Cohen would never give in to Kravis, or vice versa. Kravis certainly wasn’t going to cut a deal with Strauss. Each was determined to be King of the Sandbox.

Someone had to cut through all the bullshit, she told herself. Absent the built-up emotions, the knot ought to be easy to cut. What this takeover fight needed was, well, a woman’s touch.

“I know we can work something out,” she told Kravis. “Don’t give up on Ross. We’ve just got to get you guys in the same room. We’ve got to get you guys together.”

“Linda, I don’t know,” Kravis said. “We’re just nowhere right now. There’s a bid and an ask that are just so far apart.”

Linda Robinson pressed. “There’s just got to be a way to get together. Ross is just a great guy. I know you two would get along great. This is just crazy.”

Kravis agreed. “All right. Maybe it does make sense for us to get together,” he said.

“I’ll try to set something up” Linda Robinson said.

Johnson liked the idea. He too saw no reason not to join forces with Kravis. No matter what Cohen said, Kravis wasn’t a devil. They all had too much to lose not to join forces. And frankly, Johnson was losing confidence in Shearson’s ability to put together a viable counterbid. Andy Sage was bird-dogging the bankers’ progress and thought they were going nowhere.

“Sure,” Johnson said. “Why not?”

Carolyne Roehm was having a showing of her spring fashions at the Plaza at two o’clock, Linda Robinson pointed out. “I’m probably going to see Henry at the fashion show. What should I say?”

“Tell Henry it’s gotta be done at a high level. We made a mistake the last time when Jim and I weren’t in the room. It should be Jim and me—no one else. Try that out on him, and let’s give it one last gasp.”

Oh, and one other thing, Johnson said. “This has to be totally confidential.” No one else must know about the approach. No one, Johnson emphasized, not even—and maybe especially—Peter Cohen. Cohen and Hill were simply too volatile to be brought into the process at this point. Johnson wouldn’t even tell Steve Goldstone.

Before giving Linda Robinson the go-ahead, Johnson called her husband
at American Express. Quickly Johnson explained the rationale behind the meeting. Jim Robinson agreed.

But Kravis had more than fashion on his mind. He surveyed the room a minute before finding Linda Robinson. In addition to counting her a friend, Jim Robinson’s wife also adored Carolyne Roehm’s clothes. Kravis discreetly guided the tall strawberry-blond into a corner. He looked around, taking pains not to be noticed.

“So,” he asked. “How’s it going?”

“I’m working on it,” Linda Robinson said. “I think it can work. I just know you and Ross can work together. I’ve got to set something up with just you, George, Ross, and Jim.”

“Fine. That sounds constructive.”

“Now,” Robinson chided. “If we do this, I want you to be rational. I’m going to tell our guys to be rational, too.”

Kravis assured her he would be on his best behavior.

“And Henry,” Robinson said, “I hope this isn’t just going to be bullshit, because if it is, you can do it through some other channel.”

The show was about to start. Kravis excused himself and took a front-row seat by Oscar de la Renta. Linda Robinson slipped into a chair behind them. As the lively music pulsed—“Georgia,” “Hit the Road, Jack”—Roehm’s models bounced down the runway in a group of red, navy, and white short-skirt suits, pantsuits with boxy jackets, and jumpsuits topped with crop jackets or sweeping capes. The strength of Roehm’s collection, as always, was her nightwear, elegant bias-cut dresses in solids or striped silk; slender wool crepes with chiffon godets; lean tuxedo dresses and spare strapless slivers. Only her accessories would turn off the critics—“pins that overpowered,”
Women’s Wear Daily
fretted the next day, “scarves that overwhelmed and handbags that are best left off the runway.”

Kravis thought it all grand. Beaming with pride, he chatted and laughed with de la Renta throughout the show. As the models made their last turns, Roehm herself came out, took a turn, and waved at her husband. She looked ravishing, tall and thin, as she acknowledged the applause. Kravis waved back.

Throngs of photographers hovered around Kravis throughout the show, snapping his picture from every conceivable angle. At one point, Linda Robinson leaned over and whispered in his ear.

“When you do a really big deal, Henry,” she purred, “just think how many photographers there’s going to be then.”

“Look,” Kravis began, “there’s no point in us getting together at all if we can’t deal with some of these issues ahead of time.”

“Okay,” Robinson said. “What are the issues?”

Kravis wanted majority control of the equity and the board, but soon consented when Robinson insisted on evenly splitting both. It was the price he would have to pay for peace. But on a third issue he refused to compromise. Drexel had to run the books on the bond offerings, he said. It was the only way Kravis could guarantee a deal this size could be completed.

“Linda, listen,” he said. “This is very, very important. You’ve got to understand this. Drexel is going to play this role. It’s just got to happen. If that’s going to be a problem, this deal is not going to happen.”

“You know there’s real sensitivities on the Drexel thing from the Salomon side,” Robinson said. The two firms were archrivals at the top of the fiercely competitive bond-trading business. “Look,” she told Kravis. “Ross wants to do this deal. He wants to go with whoever’s best. It shouldn’t be a problem.”

Three points, three agreements. Both Kravis and Robinson were encouraged by their swift progress. Before hanging up, Kravis tried to haggle
a minor point. Linda Robinson thought he was backsliding.

“Henry, you know, every time we make a little progress here, you can’t just go back on it.”

“All right,” Kravis said. “Enough’s enough.”

“Do I have your word on that?”

“Yes,” Kravis said. “Do I have your word on it? Are your people good with you on each of these issues?”

“Yes,” Linda Robinson said. “There should be no problem.”

What was needed now, they agreed, was a summit.

Johnson nodded. It was the way he wanted it, too. He was taking no chances that this would end up like the disastrous Cohen–Kravis sessions. Johnson was coming to admire the way Kravis handled his investment bankers, who were kept ignorant and more or less docile. The less they knew, Johnson figured, the less they could screw up. Sometimes he wished he could handle Cohen and Gutfreund the same way.

There was only one hitch, Linda Robinson continued, a matter of social scheduling. “Tonight,” she said, “Jim and I have to go to a party at the Gleachers. What do we do?” If Gleacher found out about a summit meeting, they both knew, the news could spread like wildfire.

“Don’t do anything,” Johnson said. “Just call ’em about eight o’clock and tell ’em, you know, that something came up. You can’t tell ol’ Gleach. He’d go off like a skyrocket if he knew something was going on.”

Although she hated to be rude, Robinson agreed it was the only solution. “Now,” she said, “you have to call Henry.”

First she called Kravis herself. “Now, Ross is going to call you and confirm these things with you. Are we square?”

“I’m not going to have any surprises, am I?” Kravis said.

“No, you’re not.”

“Good.”

Minutes later Johnson placed his call.

“Henry,” he said, “let’s give this thing one more go.” It was to be Johnson and Robinson for the management group, Kravis and Roberts for themselves. “All right,” Kravis said. “But no one can know. If I hear one word, I’ll know it came from your side. Because it’s not coming from mine.”