Corporate idol rallies U of M students

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This article was published 09/09/2009 (6157 days ago), so information in it may no longer be current.

THE I.H. Asper School of Business trotted out arguably its most legendary graduate Tuesday to inspire the corporate leaders of tomorrow.

F. Ross Johnson, the man credited with orchestrating the largest corporate takeover in history at the time in 1988, spoke to 500 people, most of them first-year bachelor of commerce students, at The Fairmont hotel.

As the CEO of RJR Nabisco in 1988, he set in motion a series of events that ultimately resulted in the food and tobacco conglomerate being taken over by Kohlberg Kravis Roberts & Co., a New York-based private equity firm, for $25 billion. (All figures are in U.S. dollars.)

RJR’s management had originally intended to take the company private for $75 per share but subsequent wheeling and dealing on Wall Street saw the firm bought for $109, a more than 45 per cent premium over the first plan.

"We just sat back and watched. In five weeks, my shareholders made $13.5 billion," said Johnson, a paper boy for the Winnipeg Tribune in his youth.

The deal caught the attention of Time magazine, which put Johnson on its cover in December 1988. Not only that, but a book titled Barbarians at the Gate: The Fall of RJR Nabisco and a television movie of the same name chronicled the story. (In the film, Johnson was portrayed by actor James Garner, known for his starring roles in the popular 1950s western-comedy series, Maverick, and in the 1970s detective drama, The Rockford Files.)

Kevin Kavanagh, former CEO of Great-West Lifeco, said Johnson belongs to a group of people born and educated in Winnipeg who are elite in terms of their business accomplishments. The group includes Rick Waugh, CEO of Scotiabank.

"With the North American and worldwide attention (the RJR Nabisco deal garnered), he’s got to be the most prominent guy of our time. He’s easily the most glamorous," he said.

Kavanagh, who graduated from the U of M business school in 1953, a year after Johnson, said it was apparent more than a half-century ago that Johnson would do great things.

"He was really well-known for his lawn-cutting business in River Heights. We always used to get a kick out of that. Some of my classmates worked for him. (The business) was an early signal that he had a sense of a market niche and he had the capacity and the style to put together something to employ people and to make money. Lawn cutting wasn’t nuclear science but it was a good practical thing that he created," he said.

Glenn Feltham, dean of the Asper School, said Johnson was the first of what will be many successful alumni who will speak to students at the now-annual business luncheon.

"We’re trying to show them some of the extraordinary achievements of past graduates and help them understand the history and traditions of some of our most influential alumni," he said.

"We also want to show our students that everything is possible through working hard, taking risks and becoming involved. There are no limitations whatsoever."

geoff.kirbyson@freepress.mb.ca