Bruce Wasserstein, Innovator in Takeovers, Dies at 61

Bruce Wasserstein, Innovator in Takeovers, Dies at 61

Oct. 14 (Bloomberg) -- Bruce Wasserstein, whose more than 30 years of dealmaking earned him wealth, the envy of his peers and ultimately the top job at Lazard Ltd., has died. He was 61.

Wasserstein was hospitalized with an irregular heartbeat, Lazard announced on Oct. 11. The firm said in a statement that the exact cause of death hasn’t yet been determined. It didn’t say when or where Wasserstein died.

Steven J. Golub, vice chairman of Lazard, was named interim chief executive officer, effective immediately, the statement said. Golub, 63, has been with the company since 1984 and has served as chief financial officer and chairman of Lazard’s Financial Advisory business.

A onetime corporate lawyer, Wasserstein rose to the top of the ranks of merger advisers during the 1980s and won a well- publicized battle with Michel David-Weill to take Lazard Freres & Co. public. He became chairman and chief executive officer in May 2005.

“He made more from investment banking than any man on the planet,” said William Cohan, author of the 2007 book “The Last Tycoons: The Secret History of Lazard Freres & Co.”

Wasserstein used his wealth to become a media owner, buying New York magazine for $55 million in 2003. He paid $63 million for American Lawyer and $200 million for National Law Publishing Co. in 1997 and sold those publications to Incisive Media of the U.K. for $630 million.

The Deals

Wasserstein worked on some of the biggest deals in the last 30 years. Most recently, he was personally leading the team advising Kraft Foods Inc. CEO Irene Rosenfeld on her $16 billion takeover for British chocolate maker Cadbury PLC.

He helped guide transactions including Philip Morris Cos.’ $13 billion purchase of Kraft Inc. in 1988, KKR& Co.’s $31.4 billion offer for RJR Nabisco Inc. in 1989 and the $15.7 billion merger of Time Inc. and Warner Bros. in 1990.

“Bruce brought with him this combination of very, very complete technical knowledge of the law, and at the same time he was very imaginative in the kinds of deals and takeovers that he advised clients on,” Felix Rohatyn, a former managing director of Lazard, told Bloomberg Televison today. “It’s a big loss.”

In the RJR Nabisco deal, Henry Kravis made sure he had Wasserstein on his side “so that he couldn’t represent somebody else,” Cohan said.

Wasserstein brought to a deal a “brand of psychological bullying” that could influence his own clients to stay in the bidding and not give up, Forbes said in a 1989 profile. That trait prompted his critics to call him “Bid-’Em-Up Bruce.”

Pulling the ‘Rabbit’

“Over almost 35 years of dealing with each other, I thought his integrity was at the highest level,” said Eric Gleacher, chairman of investment bank Broadpoint Securities Group Inc. and a friend of Wasserstein’s since 1975. “To me, that’s the ultimate measure.”

Wasserstein’s ability to devise new tactics, such as “locking up” rights to the most coveted piece of a takeover target, earned him the reputation as “someone who more often than not will pull a rabbit out of the hat,” Robert Slater wrote in his 1999 book, “The Titans of Takeover.”

“I like strategy,” Wasserstein told the New York Times in December 2003. “That happens to be my particular strength and what I do for a living, but it’s also what I enjoy doing.”

In a January 2008 Portfolio magazine profile, Wasserstein dismissed the notion that his skills were more appropriate for boardroom fights in the 1980s. “That’s wishful thinking by my competitors. All that signifies is that people don’t understand what is going on,” he said. “That’s more sour-grapy.”

‘Messiah Potential’

The New York native learned mergers and acquisitions at First Boston Corp., now part of Credit Suisse AG, and left with Joseph Perella in 1988 to found Wasserstein, Perella & Co.

Germany’s Dresdner Bank AG bought Wasserstein, Perella for $1.56 billion in 2001, moving Wasserstein into the ranks of the wealthiest people in the U.S. Forbes magazine estimated his net worth to be $2.3 billion in September 2009, tied for 190th on its annual list of 400 richest Americans.

Bruce Jay Wasserstein was born on Dec. 25, 1947, in the New York City borough of Brooklyn. His mother thought his birth date gave him “Messiah potential,” Wendy Wasserstein told New York magazine in 2002, a year before her brother bought it. She also said that her brother as a child claimed his own “new world,” which he called “Bruceania.”

His father, Morris, was an immigrant from Poland who had started a ribbon company with his brothers.

Harvard Law School

After the death of his oldest brother, Morris married his widowed sister-in-law, Lola, and became father to their two children, according to Cohan’s book. Together, Morris and Lola had three more children -- Georgette, Bruce and Wendy, the playwright whose works included “The Heidi Chronicles,” which won a Tony Award and a Pulitzer Prize. She died in 2006, at 55, from complications of lymphoma.

The family moved to Manhattan while Bruce Wasserstein was in high school, and he graduated from the McBurney School. He entered the University of Michigan at 16, majoring in political science and ascending to executive editor of the student newspaper. He weighed becoming a journalist.

At Harvard University Law School, he entered a dual-degree program in law and business and graduated in 1971 with a law degree, cum laude, and a master’s in business administration, with high distinction.

Nader Summer Job

Through a summer job at Ralph Nader’s consumer-advocacy organization Public Citizen, Wasserstein met Mark Green, later to become New York City’s public advocate. They co-edited “With Justice for Some: An Indictment of the Law by Young Advocates” and co-wrote “The Closed Enterprise System,” which argued that lax antitrust enforcement led to monopolies and inflated prices.

Wasserstein “apparently learned some unexpected lessons from the project,” says a history featured on Nader’s Web site, since “he would go on to become a major figure on Wall Street as a corporate merger and acquisitions specialist.”

A 1972 research project on British mergers, which he undertook while studying at Cambridge University, stoked Wasserstein’s interest in business. Back in the U.S. he joined the New York-based law firm Cravath, Swaine & Moore LLP, then moved in 1977 to First Boston to join the mergers and acquisitions group led by Perella. In 1979 he became Perella’s partner at the helm of M&A.

‘Wasserella’

First Boston earned $75 million in fees from mergers and acquisitions in 1981, triple those of a year before and then considered a Wall Street record, according to Slater.

Wasserstein and Perella left First Boston in 1988 to form the firm that became known as “Wasserella.” Perella left in 1993. He and other partners had grown frustrated that Wasserstein was running the company as a one-man show, people who worked for them told Bloomberg News in 2004.

Dresdner Bank’s $1.56 billion purchase of the firm was a windfall for Wasserstein, who owned more than half of it. He continued to run the renamed firm, Dresdner Kleinwort Wasserstein, until its parent, Allianz AG, abandoned plans to spin it off in a public offering.

In 2001, David-Weill, chairman of Lazard Freres, named Wasserstein to run the firm founded by his ancestors in 1848 in New Orleans. Wasserstein persuaded David-Weill to take Lazard public, and the initial offering in May 2005 raised $854.6 million.

‘Took Power Very Well’

“He took power very well,” David-Weill said in a Vanity Fair interview published in April 2005. “He was afraid of sharing power and tried his very best -- and succeeded -- in expelling me. That is his nature. He is a man of solitary power.”

In 2007, Wasserstein donated $25 million to Harvard Law School for construction of a new academic center. It was the second-largest gift in the history of the law school. Wasserstein also was a major donor to the Democratic Party.

His first three marriages ended in divorce. He had three children with his second wife, Chris, and two with his third wife, Claude. His fourth marriage, to Angela Chao, took place early in 2009.

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