The Wall Street pack can be depended on to bark up the wrong tree, time after time in some cases.
Food companies again were the focus of takeover rumors last week, but none of the street birddogs had sniffed out the actual deal that broke Monday and brought a storied financial engineer back into the limelight.
The fabled Kohlberg Kravis Roberts & Co., using mostly other people’s money and promising fabulous returns, had structured some of the most notorius debt-laden leveraged buyouts of the 1980s. The financial derring-do included the unsurpassed $25 billion swallowing of the RJR Nabisco tobacco-food colossus after a bruising takeover battle.
RJR had turned into something of a bowwow investment, so KKR decided to unload half its RJR stock by using it to buy Borden Inc., a real dogeared performer. The unique deal includes a 20 percent stake in Borden for RJR.
It also raised the question of whether KKR had detected value not discernible to others, or had merely outfoxed itself.
