Barbarians at the Gate
by: Bryan Burrough & John Helyar
Central Theme:
Leveraged buyouts began as a clever workaround for wealthy business owners to escape paying estate taxes, but rapidly transformed into a vehicle for hostile corporate takeovers.
Recommendation:
This Wall Street Journal investigative journalism classic tells the story of one of the most transformative movements in banking. From 1980-1983, the number of LBOs increased by ten times as investors discovered massive profit opportunity.
Summary:
A Canadian businessman named Ross Johnson paved the way for a new breed of businessman, one that eagerly moves from firm to firm, pledging alliance to investors rather than to companies. While working his way up the corporate ladder, he strived to keep business and management in perpetual flux, constantly shaking up companies and the market alike. Critics of this approach said that the tactics encourage pursuing change for the sake of change, and left behind a trail of chaos and destruction. Johnson and his companies benefited tremendously by adhering to it, but also suffered a great downfall after losing at their own game. Ultimately, the movement shaped a new age of investment banking characterized by junk bonds, aggressive business tactics, and epic clashes.
