Lazard poised for £1.3bn float

GLOBAL investment bank Lazard could launch its own long-debated $2.5bn (£1.3bn) flotation within weeks after completing a deal for a French bank to become anchor shareholder.

City sources say Lazard chief executive Bruce Wasserstein is encouraged by the strength of the New York market, where Lazard plans to list, and by good indications of investor confidence.

Under a deal with Michel David-Weill, the bank's chairman and representative of the family investors who share control with its partners, Wasserstein has until December to achieve the listing.

But City sources say he is keen to seize the opportunity to get the initial public offering away, rather than linger. 'There has been recent interest in New York IPOs,' said a City source, suggesting Wasserstein would seize the spring IPO window.

Lazard has already made preliminary flotation filings with the US Securities and Exchanges Commission. Last Wednesday, Wasserstein completed a key preparatory move by concluding a partnership with French bank Caisse d'Epargne, which will provide a benchmark valuation of Lazard for other investors.

The mutual bank, France's third-largest lender, has agreed to invest $200m to buy shares equal to up to 9.99% of Lazard's capital. The bank, whose corporate arm is 35% owned by French state investment bank Caisse des Depots et Consignations, is reported to expect the cash will give it 7% to 9% of the Lazard equity.

That would suggest Wasserstein now expects to achieve a valuation in the $2.2bn to $2.8bn range for the bank, which has core operations in New York, London and Paris.

Proceeds that will accrue to descendants of the founding family in continental Europe, however, may now prove less than expected, because of changing exchange rates. Eurazeo, the Paris-quoted Lazard family investment and private equity company, announced last October that it expected to receive total proceeds of $784m if the Lazard IPO went ahead.

Eurazeo has rights to 15.8% of Lazard profits, together with rights over Lazard capital of $340m, rights to goodwill of $229m and interests in Lazard C shares. But last Thursday Eurazeo revealed that it has taken a €148m provision for the fall in value of its Lazard interest when converted to euros.