LAZARD chairman Michel David-Weill is threatening to scupper the bank’s flotation plans unless he is bought out from the bank his family founded, according to sources close to the company.
Paris-based David-Weill, 71, has the power to veto the sale. He owns 9% of the bank and through his investments and alliances can nominate six people to its 11-member board. He is believed to want Bruce Wasserstein, the chief executive, to buy him out before the float, valuing the entire company at $4 billion. Wasserstein is said to believe the bank could be worth as much as $6 billion.
Wasserstein is a Wall Street legend. Known as “Bid ‘em up Bruce” his last high-profile deal was the complex, legally fraught sale of the Telegraph group to the Barclay brothers.
David-Weill, whose family founded Lazard in 1848, hired Wasserstein from Dresdner Bank in 2001 to help revive the firm’s business advising on mergers and acquisitions. Wasserstein’s contract ends in 2007.
The two have since clashed frequently over Wasserstein’s spending to recruit top bankers. The feud has been ugly and public, with David-Weill claiming the bank lost $150m last year. Lazard maintains it made $249m.
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David-Weill is believed to want the same valuation for his shares that Pearson, the British education and media group, received when it sold its 18% stake in Lazard for $724m in 1998. That sale valued the bank at $4 billion.
Wasserstein has discussed a possible float with bankers from Citigroup, Goldman Sachs, Morgan Stanley and UBS. Goldman Sachs is now thought to be the first choice.