Lazard Targets Asia's Busiest M&A Market With Carnegie Takeover

Bruce Wasserstein, chief executive officer of Lazard Ltd.
Lazard Ltd.'s acquisition of Australia's Carnegie, Wylie & Co. will give Bruce Wasserstein's investment bank an instant leg-up in the Asia-Pacific's most active mergers and acquisitions market.
Lazard yesterday said it would buy closely held Carnegie Wylie for an undisclosed sum in cash and stock. John Wylie, who founded the company in 2000 after running Credit Suisse Group's Australian investment banking unit, will oversee Lazard's Sydney- based financial advisory team. Co-founder Mark Carnegie will run Lazard's Australian buyout unit.
Lazard trails in 27th place advising on takeovers in Australia, where $123 billion of deals have been announced this year, data compiled by Bloomberg show. Carnegie is fourth, after winning roles in two of the nation's biggest takeovers, including the record $14.8 billion bid for retailer Coles Group Ltd. by Wesfarmers Ltd.
``John has built a successful business, which has become highly regarded in the market,'' said Rob Stewart, head of investment banking for Credit Suisse Group in Australia. The acquisition is a coup for Lazard, he said.
Wasserstein said in May that Lazard is ``actively pursuing'' acquisitions to expand the firm's financial advisory and fund management divisions.
Earlier this month the company bought Goldsmith Agio Helms & Lynner LLC to gain contacts with mid-sized private companies. In June, Lazard formed a partnership with Vienna-based Raiffeisen Investment AG to work on mergers and acquisitions in Russia and Eastern Europe.
`Important Step'
``The acquisition of Carnegie Wylie is another important step in our five-year strategy to expand our financial advisory business by geographies,'' Lazard President Charles Ward said in a statement. The deal will ``strengthen our access in the important Asia Pacific region.''
Australia accounts for more than a third of total takeovers in the Asia Pacific region this year.
Carnegie Wylie has a 21 percent share of the Australian takeover market with just four deals this year. In addition to advising Coles, the firm is working on a Babcock & Brown-led group's $10.5 billion bid for Alinta Ltd. and Bluescope Steel Ltd.'s $560 million purchase of Smorgon Steel Group Ltd.'s steel distribution unit.
UBS AG is Australia's top-ranked takeover adviser, with a 27 percent market share from 21 deals, Bloomberg data show.
Australia's weight in the Asia-Pacific is so great that Carnegie Wylie's four deals give it a seventh-placed ranking in the wider region, the data show. Lazard is placed 42nd.
Boutique Advisers
Before teaming up with Wylie in 2000, Carnegie was a principal consultant for San Francisco-based private equity firm Hellman & Friedman in Australia and Southeast Asia.
Boutique investment banks such as Carnegie Wylie have been able to compete against so-called multiline rivals such as Goldman Sachs Group Inc. and Morgan Stanley because clients value their relative lack of conflicts of interest, such as those that came to the fore in the failures of Worldcom Inc. and Enron.
``John profited from the global move toward independent advice,'' said Greg Bundy, executive chairman of InterFinancial Ltd., a merger advisory firm in Sydney, and a former head of Merrill Lynch & Co.'s Australian unit. ``John is the leading independent adviser in Australia.''
Banks including Citigroup Inc. and JPMorgan Chase & Co. paid more than $10 billion to settle claims they helped executives at Worldcom and Enron hide losses from investors. WorldCom filed the biggest bankruptcy in U.S. history in July 2002 after admitting it inflated revenue and hid expenses to meet Wall Street expectations.
Greenhill, GCA
Enron was the world's largest energy-trading company, with market value of as much as $68 billion, before it imploded amid allegations of accounting fraud in December 2001.
In the U.S., Greenhill & Co. is the 11th-ranked advisory firm, with a 10 percent share of the $1.5 trillion market. Japanese independent firm GCA is the second-ranked adviser in the country after Nomura Holdings Inc., with 20 percent of the market, or $15.5 billion of deals.
Lazard in 2004 hired Paul Binsted and Brian Wilson, Citigroup Inc.'s co-heads of mergers and acquisitions, to build an Australian advisory business. The U.S. firm ranked sixth the following year, after advising a Macquarie Bank Ltd.-led group on the $12.1 billion acquisition of French toll roads.
Shares in Lazard rose 88 cents, or 2.4 percent, to $37.03 in New York Stock Exchange composite trading yesterday. The stock is down 22 percent this year.