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Old October 15th, 2009 #1
Mike Parker
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Join Date: Jul 2007
Posts: 3,311
Default Bruce Wasserstein, Hostile Takeover King, Dead

Wasserstein Dies, Leaves Deal-Making Legacy

By DENNIS K. BERMAN, JEFFREY MCCRACKEN and RANDALL SMITH



Bruce Wasserstein, who helped define an era of aggressive Wall Street deal makers, died at 61 years old. His passing triggers a search for new leadership at Lazard Ltd., the 120-year-old investment firm he led.

The publicly traded New York boutique on Wednesday named Steven J. Golub as interim chief executive. Though Mr. Golub is the front-runner for the CEO post, other bankers including Gary Parr and Terry Savage also are under consideration, people inside the firm said.

Mr. Wasserstein was taken to a hospital Sunday night with an irregular heartbeat. Lazard released a brief statement that said his condition was "serious" but at that point he was "stable and recovering."

Mr. Wasserstein, known for his bold tactics, sharp wit and scruffy dress, helped elevate the role of investment banker during the 1980s. Until then, investment banking was a cottage industry, in which a handful of discreet bankers remained loyal to select clients. But a series of hostile takeover offers, in industries from oil to cosmetics, thrust bankers into the center of the action.

From DuPont's winning takeover attempt for Conoco to Texaco's play for Getty Oil, Mr. Wasserstein and former colleague Joseph Perella were in the trenches of nearly every major takeover battle in the 1980s. During their heyday at First Boston Corp., the firm's aquamarine glass headquarters in midtown Manhattan, which towered over the traditional stone facade of the nearby Racquet and Tennis Club, became a symbol of the 1980s "yuppie" ethos.

Mr. Wasserstein's most public role came in the historic 1988 takeover battle for RJR Nabisco Inc. As an adviser to eventual winner Kohlberg Kravis Roberts & Co., Mr. Wasserstein helped KKR pay ever-higher prices for the $25 billion buyout. It was one reason why he earned the nickname "Bid 'Em Up Bruce," a tag he long had reviled.

Many of Wall Street's senior bankers got their start under Mr. Wasserstein, including Raymond McGuire at Citigroup, Douglas Braunstein at J.P. Morgan, Stefan Selig at Bank of America Merril Lynch and Skip McGee at Barclays Capital.

"In the deal world, there was Bruce, and there was everyone else," said Mr. McGuire, Citigroup Inc.'s global investment-banking chief, who worked 10 years with Mr. Wasserstein. "He had a gift...the intellect of a grandmaster at chess."

Mr. Wasserstein came to the fore just as the strategy and tactics of takeover battles were evolving at a fever pitch. When Bendix Corp. launched a hostile bid for Martin Marietta in 1982, the target began buying Bendix stock, in a tactic that Mr. Wasserstein dubbed the "Pac-Man" defense, named after a popular videogame of the time.

But those successes came with a price. Some deals on which Mr. Wasserstein advised turned out badly. Perhaps the most problematic was Texaco's takeover of Getty Oil; Mr. Wasserstein advised Texaco in the deal that ultimately led to a $10 billion court judgment, later settled when Texaco agreed to pay $3 billion to Pennzoil Co.

By the early 1990s, Mr. Wasserstein and Mr. Perella, who by then had left First Boston to form their own firm, Wasserstein Perella & Co., were coping with a slowdown in mergers and had a few flops in a merchant-banking fund.

Mr. Wasserstein's career took a turn when the once-inseparable duo -- their firm was known on Wall Street as "Wasserella" -- split. Mr. Perella left in 1993, joining Morgan Stanley. In 2000, Mr. Wasserstein sold his boutique bank to Germany's Dresdner Bank for $1.5 billion.

Mr. Wasserstein resurfaced in 2002, joining a firm he said he always admired: Lazard Freres & Co. At the time, Lazard was in the midst of infighting about its future, as a group of older partners clashed with younger ones.

Eventually, Mr. Wasserstein crafted a complicated deal. Lazard's existing partners would buy out Michel David-Weill, whose family had been at Lazard for generations. In 2005, Mr. Wasserstein took Lazard public. Since that May 2005 listing, Lazard shares have climbed nearly 80%, matching the performance of Goldman Sachs Group Inc. and besting the Standard & Poor's 500-stock index average.

The death is a blow for Lazard, who just two years ago lost one of its most-respected leaders, 50-year-old Michael Biondi.

Mr. Wasserstein accumulated immense wealth over the years. Forbes magazine recently estimated his wealth at $2.2 billion, ranking him 147th on its list of the 400 wealthiest Americans.

A former editor of the school newspaper at the University of Michigan, Mr. Wasserstein long has had an interest in media deals. Firms affiliated with Mr. Wasserstein owned media properties, including New York magazine and financial publication The Deal. It wasn't immediately clear how Mr. Wasserstein's death would affect his media holdings. A spokeswoman for New York magazine declined to comment.

The handling of Mr. Wasserstein's estate is likely to receive wide attention.

He has six children, and was caring for the daughter of his deceased sister, Pulitzer Prize-winning playwright Wendy Wasserstein. He recently married his fourth wife, Angela Chao.

For Lazard, a complication could be the fate of shares held by Mr. Wasserstein and the Wasserstein family trust, which combined held about 16.2 million shares, or about 11% of the company, the largest single holder. The trust also can nominate one person to the Lazard board. Mr. Wasserstein personally held 1.87 million shares, or about 2.2% of Lazard's common stock.

Lazard's shares rose 5.5% Wednesday, but trading in its stock was halted before news of Mr. Wasserstein's death. In after-hours trading, Lazard shares fell a little less than 2%, at around $42.50 each.

In an interview, Mr. Perella recalled that in the period after he left Morgan Stanley in 2005, he would occasionally run into Mr. Wasserstein in the Hamptons Mr. Wasserstein genially said that he was saving a spot for him at Lazard.

—Michael Corkery contributed to this article.
Write to Dennis K. Berman at [email protected], Jeffrey McCracken at [email protected] and Randall Smith at [email protected]

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