Bruce Wasserstein Has Millions of Reasons to Smile
William Cohan, the banker-turned-author who published The Last Tycoons: The Secret History of Lazard Freres & Co. last year, has a few details on just how much Bruce Wasserstein's investment banking firm is making off the bankruptcy of Lehman Brothers. For advising Bryan Marsal, the turnaround guru who is now running what's left of Lehman, Lazard is collecting $400,000 a month for the next two years (and then $150,000 a month thereafter). But there's more: Lazard is also getting a $5 million fee for the week's worth of work it did in September advising Lehman on the sale of its headquarters at 750 Seventh Avenue to Barclays. Wasserstein is also expected to receive another $5 million for its efforts to sell Lehman's investment-management businesses, including Neuberger Berman. And there's good reason to assume that Wasserstein is sitting back right now smiling at his current circumstances, says Cohan:
Before September 11, 2001, when Lazard's business had again fallen on hard times, another Lehman alumnus, William Loomis, then Lazard's CEO, tried to sell Lazard to Lehman for around $6 billion in Lehman stock, when Lehman was worth around $12 billion. The deal fell apart—understandably—after September 11 before the two sides could figure out whether the name of the combined firm should be LazardLehman or LehmanLazard.
After Bruce Wasserstein wrested control of Lazard from David-Weill, in 2002, and before Wasserstein launched Lazard's IPO, in May 2005, he went to see Dick Fuld, Lehman's longtime CEO. Wasserstein tried to pick up where Loomis left off in selling Lazard to Lehman. Wasserstein's price was $6 billion to $7 billion. Ken Wilson, then a partner at Goldman Sachs and former Lazard partner, told me that an outraged Fuld said to Wasserstein at the time: "I can see why you are such a shitty M&A banker. Why do you give such bad fucking advice? If this is what you tell people, you gotta be out of your fucking mind." The meeting ended quickly thereafter.
We're going to take this as a sign that Fuld and Wasserstein won't be exchanging Christmas cards this year.
How Lazard Is Making Millions Off Defunct Lehman [The Daily Beast]