--Trian throws support behind Lazard's strategic plan
--Friendlier approach than campaign launched last year regarding
State Street
--Trian sees Lazard shares doubling by 2014
By Liz Moyer
Nelson Peltz's Trian Fund Management L.P. has amassed a 5.1%
stake in Lazard Ltd. (LAZ), calling the shares "significantly
undervalued" and throwing support behind a strategic plan outlined
earlier this year by Lazard's management.
With the stake, disclosed in a securities filing Monday, Trian
becomes Lazard's biggest outside shareholder, leaping over Ariel
Investments (4.96%) and Marathon Asset Management (4.32%),
according to FactSet.
Trian and Lazard management had met several times prior to
Monday's announcement to discuss Lazard's business and strategies
to enhance shareholder value, Trian said in a statement Monday.
In its own statement Monday, Lazard said, "Trian Partners are
experienced and successful investors, and we appreciate their
confidence in Lazard's franchise and strategy."
Shares of Lazard jumped after the midafternoon disclosure,
rising 5% to $24.22. They are down 7.2% year to date.
In a presentation Trian prepared about Lazard's prospects, Trian
projects Lazard could earn more than $3.50 a share in 2014,
implying a doubling of the current share price.
It is a markedly more friendly approach than some of Trian's
other investment activities. Last year, the activist investor
launched a campaign to push State Street Corp. (STT) to change its
business model, including a spinoff of its investment management
division. State Street management has said it isn't interested in
spinning off the business, saying it fits well with the firm's
other main business, which is asset servicing.
Trian, which owns about 6.3 million Lazard shares, said in its
statement Monday that Lazard had attractive, low capital-intensive,
fee-based businesses "positioned to be a natural beneficiary of
long-term financial market trends."
It said it believes the bank's shares are "significantly
undervalued," adding it supports Lazard's new strategic plan, which
focuses on margin improvement, capital allocation and improved
corporate governance.
In April, Lazard reported its first-quarter net income fell 54%
on costs tied to cutting staff, yet the investment bank posted a
core profit and revenue that easily topped expectations on stronger
demand for deal-making advice. It recently named former Citigroup
Chairman Richard Parsons to its board.
Trian's move comes as independent, or so-called boutique, firms
grab a bigger share of the market for advising corporations and
governments on big transactions.
Lazard rival Evercore Partners Inc. (EVR), run by ex-BlackRock
President Ralph Schlosstein and founded by ex-Treasury official and
longtime banker Roger Altman, had a bit of a run-in with its own
shareholders at its annual meeting last month. More than
half--57%--voted against a proposal to increase the firm's stock
incentive compensation by 11 million shares. Had the proposal
passed, it would have added to the 20 million shares of common
stock Evercore has available for pay awards under its 2006
incentive plan.
-Nathalie Tadena and Brett Philbin contributed to this
article.
Write to Liz Moyer at liz.moyer@dowjones.com