Low price in Lazard's complex offering

THE controversial Initial Public Offering of boutique investment bank Lazard has closed with the shares priced at $25 each, the low end of the expected range.

The issue raised $854.6m (£447.2m) by selling 34.2m Class A shares, but analysts said the complicated structure meant institutions were hesitant to pay top dollar.

Doubts about the make-up of the Lazard deal have been raised since the prospectus was first released, and commentators have criticised the structure of the deal masterminded by chief executive Bruce Wasserstein.

'The more complicated the structure, the lower the price that can be achieved,' said James Ellman, president of Seacliff Capital.

Besides the IPO, Lazard sold $550m of 10-year notes, less than the $650m it had planned. In addition, the company sold $400m of notes convertible into stock.

The IPO and concurrent offerings generated $2.05bn, but $1.6bn of that will go to buy out the company's historical partners, including former chairman and Lazard family heir Michel David-Weill.

The offering is the biggest IPO from an investment bank since Goldman Sachs in 1999, and Goldman was the lead underwriter for this one. In the first quarter, Lazard was ranked seventh worldwide for mergers and acquisitions volume, with $89.3bn in activity, according to Thomson Financial.