Lazard details plans for $3bn IPO

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The Independent Online

Lazard, the investment bank which has been trying to agree terms for a flotation for months, last night finalised the plan, saying it would sell shares valuing the bank at about $3bn.

Lazard, the investment bank which has been trying to agree terms for a flotation for months, last night finalised the plan, saying it would sell shares valuing the bank at about $3bn.

The move brings to an end months of wrangling between Michel David-Weill, Lazard's chairman, and Bruce Wasserstein, its chief executive. The two executives have clashed over various issues, including what value should be attached to Lazard and over the costs of the bank under Mr Wasserstein, who has spent heavily to recruit high profile bankers.

M. David-Weill's control of the firm will be brought to an end when his stake is bought out as part of the IPO. For Mr Wasserstein's part, he has agreed either to resign or try to renegotiate his contract should the sale fail. Mr Wasserstein has until 2006 to complete an IPO, which will be organised by a consortium of banks including Goldman Sachs. Lazard aims to raise as much as $850m by selling shares in the flotation on the New York Stock Exchange.

Mr Wasserstein plans to use proceeds of the sales to finance the purchase of the 36 per cent stake in Lazard controlled by M. David-Weill and h is allies, including the French investment group Eurazeo. M. David-Weill in October demanded Lazard pay him and allies $1.62bn in cash for their controlling stake.

With Lazard a publicly traded company, Mr Wasserstein could tap capital markets more easily. Since joining as head of Lazard in 2002, he has hired more than 40 senior bankers. In 2002, he increased payments to partners 51 per cent, from $198m in 2001, according to Eurazeo.

Lazard earned $834.9m in net revenue for the first nine months of 2004, according to a US regulatory filing made to accompany its IPO plans. A sale of shares in Lazard, which has offices in New York, London and Paris, would leave Rothschild as the world's biggest privately held investment bank.

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