Lazard

"He defines himself initially as: "I am first and foremost the man, the scarcely visible link, who unites and underpins the efforts of the Lazard houses. I believe that for some, Lazard-Paris is Jean Guyot; for others, Antoine Bernheim or Bruno Roger. That Lazard-New York is Félix Rohatyn or Zarb. That Lazard-London is, depending on who you ask, John Nott or Wemer Wylie... But in fact, it is true that through them, it is still me; in other words, the house is always "ours", and its story continues...""

"During the some one hundred and forty years over which the Lazard saga unfolds, many fortunes have been built in France. Brilliant industry captains emerged. None survived the test of time. Forgotten, Louis Renault. Squandered, the considerable fortunes of André Citroën or the perfumer François Coty."

""The historical mistake of the Rothschilds was that they never had an American base; a base that we at Lazard have consolidated for more than forty years. Not that Lazard-Paris isn't doing well, far from it. But New York is the "sports center." If you want to be a champion, or even a semi-champion, New York is the ultimate arena. The rest of the world is just provincial in comparison," sums up Michel David-Weill."

"The history of Lazard was, however, chaotic. Several times, the saga nearly ended abruptly. In the dark days of 1940, when all "Jewish assets" were seized, when the fabulous collections of the David-Weills were being added to the artistic loot of Hitler or Goering, who could have imagined that everything would restart less than five years later?"

"a particularity made a difference between Lazard and the others. It is what, in any case, spared it the guillotine of nationalizations in 1981."

"Three financial operations-Pathé, Lazard, Vallourec-and seven years later, Alain de Pouzilhac, then CEO of Havas, experienced the surprise of a phone call, also initially giving the benefit of the doubt to the raider: "It was July 20, 2004. I was at the headquarters of Havas in Suresnes when Vincent Bolloré called me-he was, I believe, on his boat, on a cruise. He immediately addressed me informally. 'Alain,' he said to me, 'I think Havas is undervalued but on the path to recovery. I took advantage of it to buy, without exceeding 5%.' At first, I was pleasantly surprised that an investor of his reputation was interested in us-it was a sign of confidence, after a terrible year in 2003. Maybe a chance for Havas, which wanted a stable shareholder. So, initially, his approach seemed positive to me. To the point that, when studying our bid for the acquisition of the American company Grey, I deemed it necessary to inform him. He immediately replied, 'I don't want to know anything, so as not to be informed, and to continue buying shares on the stock market.' And that's what he did. Since then, I have met with Vincent Bolloré on four occasions, but it is impossible to learn more about his intentions. I still don't know if he is a raider, with 20% of Havas, intending to dismantle or sell the company, or an industrialist who wants to create a major media group. Is he trying to take control of the company without paying the price? Absolutely not! I don't make it a question of individuals-investing around 300 million euros in Havas is very respectful.""

"Combret is not in a position to oppose Bernheim, one of the figures at Lazard where a simple rule prevailed: no big moves for the second fiddles. He therefore steps aside, a little stunned to see that everything is now going over his head."

"The difficulty lies elsewhere, in the required majority rules. For a concordat to be adopted, it must be approved by half of the chirographers holding two-thirds of the claims in value. With the help of Lazard, Arnault contacted them one by one to offer to buy back their claims. The task is enormous: there"

"If he is suspicious and perfectly organized, Bernard Arnault is also quick. Faced with the Dalton brothers, he decides to play Lucky Luke, the cowboy who shoots faster than his shadow. He will buy the shares held by the Willot brothers. He doesn't have the necessary money? He asks Antoine Bernheim for help, but he backs out: he did not get the approval of Michel David-Weill to commit further. He himself is not very enthusiastic: why spend so much money to recover these useless shares? They are only of interest to Bernard Arnault, in a heritage context. Regardless of Lazard's reluctance! Arnault will turn to Crédit Lyonnais, always ready for adventure."

"It is better to deal with God than with his saints. The Moët-Hennessy clan reacts like Chevalier: since Racamier opened the door to Arnault, they might as well deal directly with him! A royal path thus opens up before the boss of Financière Agache. Especially since David Dautresme recovers 12% of the capital of LVMH, just by making a few phone calls. These securities are, in fact, in the hands of the six investors to whom the OBSA issued by Moët-Hennessy in 1987 had been placed. Since then, these securities have discreetly remained parked in these six parking lots: UAP, Caisse des dépôts, Crédit agricole, Worms Bank, BNP and... Lazard, lead manager of the operation. Dautresme is thus negotiating with these establishments the conditions for the sale of these OBSA to Bernard Arnault. But the sellers must not appear, as it was stipulated that these securities had to be placed in the general public. Also, once the terms of the transaction are agreed upon, they will be invited to go through a discreet Belgian-Luxembourg intermediary, Belmavobel International Securities."

"This document has one merit: it shows that it was Henry Racamier who went to fetch Bernard Arnault. And it gives the latter legitimacy to at least set foot in LVMH, without prejudice to the betrayals and counter-betrayals of others later on. "From the start, I was deceived," Bernard Arnault would later assert. The principles are set: execution will take the form of a friendly takeover bid for 30% of LVMH's capital, as allowed by law at that time. The shares will be purchased by Financière Agache at a price of 3,000 francs and brought to a joint company owned equally by the two allies. The day of the assault is set for Monday, June 27. This takeover bid was concocted by André Battestini of Paribas, who advises Racamier. Lazard is not in on the deal. This crime of high treason (and self-interest) will have serious consequences."

"Instigators of the merger, Paribas and Lazard will not be forgotten. The former will receive a commission of 15 million, the latter 12.5 million. The feasting is complete."

"Even though its coffers were empty, regardless of what was said at the time. Based on his good reputation, past successes, and the support of Lazard, these 21 billion francs were borrowed from Crédit Lyonnais, which opened massive and immediate lines of credit, practically on demand."

"On the pretext that this affair was embarrassing for the reputation of the company (and for that of Lazard), but vital for its independence. But when the COB opened its investigation into LVMH in early 1989, it came across evidence that the placement of OBSAs in France, with friendly hands and not dispersed abroad, was premeditated: a convention linked the institutional investors."

"says: I spoke with Dehecq. We're in agreement. Your business interests me. Excellent. When would you like to begin negotiations, and with whom? And what is your starting position? I won't negotiate the price, payment terms, or other details. You just need to take the sale protocol signed with LVMH before its withdrawal and change the names. I have only one condition: the deal must be finalized and signed before 9 a.m. tomorrow. The banker is astonished: But that's not possible: it's 5 o'clock in the afternoon! I'm sorry, but this condition is non-negotiable. Change the names? Nothing is ever that simple. The Lazard team will work through the night, along with lawyers from both parties who will nibble on lukewarm pizzas. Patricia Barbizet will go to sleep from 3 a.m. to 5 a.m. during the drafting of the agreement proposal, which she will come back to discuss and then validate."

"To anyone who will listen, Antoine Bernheim always diligently extols the merits of Bernard Arnault, but he cannot hide his bitterness. Since Arnault reached the heights of success and since Bernheim himself was semi-retired due to the clan struggles that tear Lazard apart, Arnault no longer asks him for advice or even gives him a friendly nod. Although he is the vice-president of LVMH, he no longer participates in the gala dinners organized by Arnault. He is no longer invited to Saint-Tropez in the summer. "Gratitude is a disease of dogs that is not transmissible to humans," the old lion sometimes tells his interlocutors, adding: "The only way to maintain good relations with Bernard Arnault is to stay away. You should not be indebted to him.""

"Antoine Bernheim, still a board member and vice president of LVMH. To the former managing partner of Lazard who provided him with the financial means for his ambitions, built his credibility in the business microcosm and in the political world, and helped him throughout his rise, he devotes only a few lines. However, the dedication of the book he sends to him is full of praise: on the entire front page, he writes that without him, he would be nothing and that his gratitude is total. Bernheim will thank him, adding, however, that he would have preferred to read this piece of glory in the body of the book rather than in the dedication1919..."

"At most investment-banking firms, if they had filed to do a junk underwriting for $ 100 million but found they could sell only $ 50 million, they typically would cut the deal back to whatever they could sell. But Milken had for years now made it a point of honor that he would not cut back a deal. As he would testify with apparent pride in a deposition in mid-1986, “I would say also that in my entire career on Wall Street I have never backed out of a transaction once I’ve agreed to stand up to it, no matter how onerous it turned out to be.” This policy presumably sprang not only from Milken’s sense of probity, but from his knowing it was good for business. It was meant to—and generally did—incur a sense of deep indebtedness in the client. Marshall Cogen of General Felt Industries, for example, recalls that in the hard times of 1980 Drexel filed to raise $ 60 million for General Felt but found they could sell less than half of that; the firm took the rest. As Cogen said in an interview in 1986, “I have never seen that done by another investment banking firm—never. Today everyone wants to bank us—Goldman, Lazard. But no one else would have raised that money back in 1980. And without it I never could have developed the base I have.”"

"At most investment-banking firms, if they had filed to do a junk underwriting for $100 million but found they could sell only $50 million, they typically would cut the deal back to whatever they could sell. But Milken had for years now made it a point of honor that he would not cut back a deal. As he would testify with apparent pride in a deposition in mid-1986, “I would say also that in my entire career on Wall Street I have never backed out of a transaction once I’ve agreed to stand up to it, no matter how onerous it turned out to be.” This policy presumably sprang not only from Milken’s sense of probity, but from his knowing it was good for business. It was meant to—and generally did—incur a sense of deep indebtedness in the client. Marshall Cogen of General Felt Industries, for example, recalls that in the hard times of 1980 Drexel filed to raise $60 million for General Felt but found they could sell less than half of that; the firm took the rest. As Cogen said in an interview in 1986, “I have never seen that done by another investment banking firm—never. Today everyone wants to bank us—Goldman, Lazard. But no one else would have raised that money back in 1980. And without it I never could have developed the base I have.”"

"The threat of a raid is becoming increasingly clear. Alain Chevalier and Jean-Louis Masurel call on Bruno Roger for help. Together, they reflect on different means of deterrence and decide on an issuance of bonds with subscription warrants for shares (OBSA) on the eurofranc market. Shareholders waive their preferential subscription rights in favor of potential foreign investors whose names they don't even seek to know. The issuance is launched in mid-March 1987 under the direction of David Dautresme, managing partner of Lazard. The bank on Boulevard Haussmann takes the lead of the banking pool which includes Crédit Lyonnais, BNP, and Crédit Suisse-First Boston. Each bond, worth 10,000 francs, is accompanied by 18 warrants allowing subscription to Moët-Hennessy shares at 2,720 francs until April 1990. The bonds and warrants are listed separately. In total, the operation ultimately yields nearly 4 billion francs and potentially represents 18% of the group's capital."

"In this autumn of 1987, Bernard Arnault's attack plan is ready. His springboard will be Dior, his aircraft carrier, Crédit Lyonnais, his fighter jets, Lazard, and his various companies will serve as ammunition. As for his objective, it will be LVMH."

"One can well imagine their first conversation on the phone, one morning in early May: “Would you be interested in a stake in LVMH, Henry Racamier must have said, somewhat condescendingly.” “It would be a great honor, Bernard Arnault certainly replied in the tone of the greatest deference.” When the young boss of Dior hangs up, his smile is carnivorous. "I won," he probably thinks, before inviting his top executives to lunch. Bernard Arnault does not warn Antoine Bernheim. It is still premature. Lazard is already engaged with Chevalier. So he turns to Crédit Lyonnais for the occasion. A first meeting is scheduled with Henry Racamier's banker at the Dior headquarters."

"What are these external pieces of information that prompted the attorney general to change his mind? It is difficult to know the source of the instructions and their motivation. What influences were at play? Did Arnault's entourage take advantage of its introductions to the Prime Minister, Michel Rocard, and his chief of staff, Jean-Paul Huchon? It is likely. Did Antoine Bernheim use his connections at the Elysée Palace? It was rumored at the time that Jacques Attali, François Mitterrand's adviser, could join Lazard. A third hypothesis is also plausible: the position of the public prosecutor may be due to the rivalry between the Chancellery and the COB. In any case, from that day on, the public prosecutor will often speak in favor of Arnault's theses."

"he became the historic mentor of industrialists Bernard Arnault and Vincent Bolloré, and to a lesser extent the advisor of François Pinault, as well as Nicolas Sarkozy, at least in his early years. He also counts among his European "protégés": Italian John Elkann, the heir to the Agnelli dynasty, or banker Gerardo Braggiotti, also a former Lazard associate."

"In the 1960s, he participated in the creation of the famous "collateral structures" that allowed Lazard to expand by taking control of the holding company Rue Impériale de Lyon, Immobilière Marseillaise, Sovac of which the bank only had 5%, or the investment holding company Gaz et Eaux, still chaired today by Michel David-Weill."

""Certainly, he had targets. He wanted to buy Boussac, which belonged to the Willot brothers, then the Dior perfumes because Dior Couture was part of Boussac. He had targets and considerable determination. But at the time, he didn't have the financial means or the connections. I helped him until he reached the top," sums up the former associate of Lazard."

""Antoine Bernheim told Bernard Arnault, 'I am willing to take the risk up to the same amount as you.' He committed to investing 90 million francs on behalf of Lazard, matching Bernard Arnault's investment level. This commitment by Antoine Bernheim gave confidence to other investors. We managed to complete the fundraising round, which was far from certain at the time due to Boussac's second consecutive bankruptcy.""

"the Lazard firm, founded by the Lazard and Weill families in 1876 in San Francisco, after starting as a trading house in 1848 in New Orleans."

""When I was there in the 70s, Lazard really had the expertise in mergers and acquisitions that other banks didn't have," he recalls with a hint of quickly suppressed nostalgia. "The evolution of this profession slightly amuses me today.""

"When he joined Lazard, his role immediately became to bring money into the bank. "He did well-known and lesser-known deals. Little by little, by getting involved in important matters, he developed a taste for power," his son summarizes."

""Without Antoine, Bernard Arnault probably would not have been able to make a name for himself," confirms a former collaborator of the Lazard bank. At that time, Antoine was the savior of the investment bank. After the nationalizations of 1981, Lazard had a near-monopoly on business in Paris."

"Upon his arrival, he organizes the takeover of Rue Impériale de Lyon and l'Immobilière Marseillaise, two companies with significant real estate portfolios in the city centers of Lyon and Marseille, which will allow Lazard to have a solid heritage."

"At Lazard, he created Sovac (Society for the Sale of Credit Automobiles), a financing company specialized in consumer car loans, thus making Lazard Frères a significant force in consumer credit."

"Faced with the rise of Nazism, he left France in 1939 and became one of the main architects of Lazard's expansion in the United States after being appointed to lead the bank's American operations in 1944."

"Lazard—like Lehman Brothers, Kuhn Loeb, Dillion Read, and Goldman Sachs—was viewed as a Jewish firm."

"When at last Mr. Meyer spoke, I learned I was wrong. I was not dismissed. Instead, he offered me the opportunity to go to Europe as part of a training program. “I realize you have other interests than finance,” Mr. Meyer said. Nevertheless, he suggested that I go work at several European firms associated with Lazard to learn the basics of the business. “When you return, then you can decide what you want to do in your life.”"

"Meanwhile, our ninety-day option was rapidly drawing to a close. Purchasing control of the company would cost us about $5 million. Petrie insisted that another $5 million would be needed to improve Avis’s deteriorating fleet of vehicles. Forty years ago $10 million was not an inconsiderable sum, particularly for a small investment bank with a stated capital of only $17 million. No less daunting, Avis had lost $1.2 million in 1961. Nevertheless, now that we had a management team ready to assume control—a team we had confidence in—we moved forward. Lazard exercised its option to acquire the Dumaine family stock."

"When he was done, Ted Ashley and I made the presentation of the Kinney offer. At first, our discussion was a litany of numbers, the dollars and cents we would pay for the stock, and the promising financial potential we saw in the studio’s future. This was a typical investment banker’s strategy: stick with us; we’ll make you rich, and then even richer. But, rather untypically, after I had waved the golden carrot, I proceeded to brandish a very sharp stick. I announced that we had taken it upon ourselves to alert the SEC to Commonwealth’s financial shenanigans. And, in another uncommonly aggressive tactic, we had also shared our analysis of the Commonwealth balance sheet with its large institutional shareholders. This was not the way we generally conducted business at Lazard, but the deal was not our usual sort of deal, nor were we up against the usual sort of principals. On behalf of our clients, we could, when it grew necessary, become fiercely pragmatic. Rozet was furious. As he stormed out of the meeting, he paused to shove his face directly up against mine and shout that he would sue me. But it was too late. I knew that Charles Allen and Bernie Cornfeld were too sophisticated and too practical to tie their futures—and capital!—up in a teetering corporation. They would have no choice but to negotiate the best deal they could with Kinney. Which, in short order, they did."

"in the 1970s, this unwritten “social contract” was ripped up by Morgan Stanley. This quintessential “establishment” investment house made a hostile bid on behalf of International Nickel, one of its longtime clients, for a battery maker. In the aftermath, all the old-line houses—with the exception of Goldman Sachs—followed. The rules had changed. And they had for us, too, at Lazard, at least somewhat. But I personally did not care for hostile takeovers, and would participate in such an activity solely on the behalf of a large, well-financed, longtime client of the firm and only after exploring all other possible alternatives. In a financial lifetime that included several hundred transactions, less than half a dozen of my deals involved my representing hostile bidders."