Lazard bows to rival's pressure

Michel David-Weill, the imperious head of Lazard, is understood to be ready to accede to demands for the investment bank's Byzantine ownership structure to be reformed.

Michel David-Weill, the imperious head of Lazard, is understood to be ready to accede to demands for the investment bank's Byzantine ownership structure to be reformed.

He is said to have indicated to UBS Warburg, the rival group that's built up major stakes in the labyrinth, that changes are afoot and will be unveiled later this month. The concession came after the passing a fortnight ago of UBS Warburg's deadline.

But Mr David-Weill, who speaks for partners who still control four fifths of Lazard's shares, has declined to inform UBS Warburg of his plans for fear of making the bank an insider and, therefore, unable to trade the shares. UBS Warburg declined to comment.

One banker said: "The French are likely to buy out these minorities - at a premium."

UBS Warburg - in tandem with French entrepreneur Vincent Bolloré - built up stakes in three companies with direct and indirect influence over Lazard. It then started asking Lazard to buy out these minority shareholders, which trade at a discount to their net asset values (NAVs).

Its call for change reached a cacophony at the recent annual general meeting of Azeo, a Lazard shareholder in which UBS Warburg has taken a stake. But its motion was blocked by Azeo's French backers.

Mr David-Weill has run Lazard for 23 years, and until now has shown no signs of relinquishing his grip on an investment bank thought to be worth about $5bn. However, the disquiet felt by Lazard's disenfranchised minority share- holders has intensified amid fears that the bank's legendary deal-making prowess is being eclipsed by the growth of giant US investment groups such as Goldman Sachs and Morgan Stanley Dean Witter.

Lazard has also been riven with personality disputes that have led to the exodus of a number of key executives.

Mr Bolloré, who is a 48-year old billionaire businessman, has exerted his influence through a 31 per cent stake in Rue Impériale de Lyon, which indirectly controls 17.4 per cent of Lazard.