Arbitrageur in search of value

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The Independent Online
Guy Wyser-Pratte is the son of Eugene J Wyser-Pratte, a French banker who founded an arbitrage business in Paris in 1929, writes James Bethell.

Born in German-occupied France in 1940, he emigrated to the US in 1948. He graduated in American diplomatic history from the University of Rochester in 1962 and served in Vietnam as a captain in the Marines from 1962 to 1966.

He later took an MBA at New York University before turning the business his father founded into the most profitable division of Prudential-Bache Securities, the Wall Street securities house that had absorbed it.

Mr Wyser-Pratte, now heading his own arbitrage firm, denies that his approach exemplifies the sort of aggressive investment style depicted by Michael Douglas in the film Wall Street.

"We are not raiders, we are corporate governance specialists," he said. "We use corporate governance principles to restore value to companies where the boards have trampled on shareholder value. We often intercede to force the board to adopt policies which maximise shareholder valued instead of their own interests."

Mr Wyser-Pratt fell out of the 1980s with a bump when in 1990 Prudential- Bache Securities closed its risk-arbitrage operation. A year later, he re-established the family firm.

The much-heralded death of mergers did not last. While some arbitrageurs feared their diet would be limited to bankrupt businesses and hustling up deals, Mr Wyser-Pratte was active with a series of interventions marked by aggressive stake-building, highly publicised criticisms of management and, more often than not, rich rewards.

Fieldcrest, US Shoe, Lac Minerals, Sears Roebuck and Van Dorn are among companies to have entered his sights in the past four years, in a strategy that relies more on public relations than on the power of the stakes he holds.

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