Lazard top brass at loggerheads over carve-up of float proceeds

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The Independent Online

Bruce Wasserstein is facing a potentially explosive showdown with senior bankers at Lazard as he tries to force through a deal to pave the way for next year's proposed $3bn (£1.7bn) flotation.

Bruce Wasserstein is facing a potentially explosive showdown with senior bankers at Lazard as he tries to force through a deal to pave the way for next year's proposed $3bn (£1.7bn) flotation.

Lazard's chief executive has scheduled meetings with its working partners in the next few days after striking a deal with the "capitalists", retired partners who still own more than a third of the merchant bank's shares.

However, many of Lazard's older working partners, un-happy that Mr Wasserstein's hotshot recruits are set to get more money than them, may oppose the deal unless they get a fairer share of the float proceeds.

Mr Wasserstein is believed to have asked the partners to take a one-third pay cut and may even look at cutting staff numbers ahead of the float.

David Kungl, a director of research house SNL Financial, said Lazard's old-school bankers were critical of Mr Wasserstein, saying he had "promised too much and paid out too much to those star bankers."

Mr Wasserstein has been on a recruitment drive since his appointment in 2002, raising the ire of the chairman, Michel David-Weill, whose income from his stake in the company has suffered as a result.

Mr David-Weill resisted the chief executive's bid for control until last week, when he gave tentative approval for a buyout.

Lazard's float is being hit by a collapse in business at the London arm. The bank has fallen from second to 12th in the ranking of top deal advisers in Europe in the first nine months of this year, according to figures released on Friday by research group Mergermarket.

"Lazard has dropped from the radar," commented one rival. "We're just not seeing them."

In the US, Lazard has shown good figures due to its involvement in JP Morgan's purchase of Bank One, and has gone from 10th to eighth in Mergermarket's listing of US advisers.

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