The New Barbarians at the Gate

If you've never read the book "Barbarians at the Gates", I highly recommend it!

The book covers the Private Equity buyout of RJR Nabisco in the late 1980s.

The story follows CEO F. Ross Johnson as he tries to engineer a management-led buyout of his own company, framing it as a way to “unlock value,” while also ensuring a massive personal payday.

That move ignites a chaotic auction: rival buyout firms (most famously KKR) jump in, investment banks jockey for fees and influence, and bidders repeatedly raise offers in a frenzy that looks less like careful stewardship and more like ego, momentum, and deal-making theater.

As the price climbs, the book emphasizes the darker mechanics of the era: the reliance on heavy debt, the role of “junk bond” financing, and how advisors can shape outcomes while claiming neutrality. In the end, shareholders get a richer payout—but the company is left with an enormous debt load, and the process exposes how incentives (executives, bankers, lawyers, PE sponsors) can diverge sharply from long-term business health.

This became one of the largest LBOs ever, at ~$25B, with most of the financing coming from debt (~87%)

The New Barbarians at the Gate

A bunch of people have been eyeing Warner Brothers Discovery.

It looked like the deal was going to Netflix, after Warner agreed to a deal with Netflix. Netflix agreed to buy WBD for $72B after the entertainment company splits its studios and HBO Max streaming business from its cable networks, a deal that would reshape the entertainment and media industry.

Then, Paramount came back in. This time, hostile.

Just now, Paramount launched a $30/share (or $77.9B) hostile takeover for WBD. All cash.

This deal gives shareholders of WBD $18B more in cash than the Netflix deal.

Seems like this story is developing and getting spicier. History sure is rhyming.