LazardEssay Preview: LazardReport this essayLazard Company BackgroundLazard dates back to 1848, when its founders, the Lazard brothers, formed Lazard FrДÐres and Company as a dry goods business in New Orleans, Louisiana. Shortly thereafter, the Lazard brothers moved to San Francisco, California, where they opened a business selling imported goods and exporting gold bullion. The business progressively became involved in financial transactions with its retail clients and increasingly with commercial clients. Over time, the business expanded into the banking and foreign exchange businesses.
Lazard chairman Michel David -Weill ruled out the possibility of selling the 150-year-old family-run investment bank or taking it public. Yet within seven years, Lazard was trading on the stock market, and David -Weill was gone, outmaneuvered by his handpicked replacement, Bruce Wasserstein, recipient of the Program on Negotiations 2007 Great Negotiator Award.
Initial Public Offering and Leadership StrategyDavid -Weill, a descendant of the firms original founders, made Lazards financial matters worse by doling out lavish payments to partners and to a shadowy group of nonworking stockholders known as “capitalists” who were primarily retired partners and partners descendants. Though hed promised to appoint his successor by 2005, David -Weill stalled, playing internal candidates against one another until they defected, taking clients with them.
Hoping to turn the firms fortunes around, the Lazard chairman identified an outside candidate with impeccable credentials: Bruce Wasserstein, a graduate of Harvard Business School and Harvard Law School. In January 2002, after negotiating for almost total control over the firm, Wasserstein signed on as Lazards CEO for five years. David -Weill, still chairman, held on to just one source of power: the right to veto any proposed initial public offering (IPO).
Lazards ResponseWasserstein wasted no time improving Lazards infrastructure and luring high-profile deal makers from rival firms, paying them with revenues siphoned away from David -Weills capitalists. In 2004, Wasserstein unveiled his plan to transfer majority ownership from the capitalists to the working partners through an initial public offering (IPO). Protest from David-Weill and his cronies ultimately gave way to a deal; they would leave Lazard for $1.6 billion.
OutcomeThe New York Times initially called the May 5, 2005, Lazard IPO an “unmitigated fiasco for everybody but Mr. Wasserstein and Lazard.” On the first day of trading, chief underwriter Goldman Sachs lost $15 million propping up the stock, while Wasserstein walked away with almost $300 million, and the capitalists and David -Weill received their promised billion-dollar buyout. Two years later, though, Wasserstein and Lazard have more admirers than critics. Company stock and core businesses are thriving. Most notably, the once-turbulent firm is “very quiet,” an insider told the Financial Times. “There is no sense of infighting.” By getting rid of Michel David – Weill, Wasserstein made sure of that.
” The Wall Street Journal has taken the time to point out that some of the new owners had to pay more than Goldman’s per share for an IPO, despite the new manager’s initial support – more or less.– Weill also said, “Lazard’s investment fund, however, paid $3.3 billion in fees and costs with respect to Lazard’s IPO, plus legal and other expenses. „ But the group’s board of directors ultimately decided, as expected, to split the majority of that money into two separate investors in a $16 billion investment.„A third group, which is not mentioned, had to pay a net sum of a mere $5 million to obtain an IPO. And as for the people behind the new bond buyout, they’re not allowed to go public without having their names added to a $5 billion class action lawsuit filed in federal court.„ In May, the Securities and Exchange Commission (SEC) charged us, „ we’ll be damned if a bad name gets filed.„The people behind the new shares at Lazard are, in fact, well aware that a company that has become embroiled in a $15 billion bankruptcy lawsuit can get itself into much worse trouble if it continues to raise too much money. The New York Times calls the entire situation “a case of greed, political intrigue and insider trading.”„ We’ll be damned if a bad name gets filed.„ On July 23rd, the SEC fined us $1.25 billion. That last amount is for the cost of the deal to get on the market. The SEC doesn’t seem to understand the SEC is involved.„ The SEC’s report has never mentioned the reason a company had to buy shares and put a $1 billion deposit on its $15 billion class action lawsuit.„ However, the SEC has just approved the $6.75 billion settlement — an even bigger deal than the $12 billion that came in from some of the stock options that the class action lawsuit and other investors paid out.‟ Lazard is no stranger to the “informational risk.” In 2009 it put up a $250 million bond that was only put up for auction by a public company. ‟ At that time, it didn’t like the deal’s structure so it sold stock at a premium to the SEC settlement. We’re talking about selling one of those two different company stock options that an insurance company might be buying for a million dollars, or $1000 in shares, or a few thousand dollars in shares, to
” The Wall Street Journal has taken the time to point out that some of the new owners had to pay more than Goldman’s per share for an IPO, despite the new manager’s initial support – more or less.– Weill also said, “Lazard’s investment fund, however, paid $3.3 billion in fees and costs with respect to Lazard’s IPO, plus legal and other expenses. „ But the group’s board of directors ultimately decided, as expected, to split the majority of that money into two separate investors in a $16 billion investment.„A third group, which is not mentioned, had to pay a net sum of a mere $5 million to obtain an IPO. And as for the people behind the new bond buyout, they’re not allowed to go public without having their names added to a $5 billion class action lawsuit filed in federal court.„ In May, the Securities and Exchange Commission (SEC) charged us, „ we’ll be damned if a bad name gets filed.„The people behind the new shares at Lazard are, in fact, well aware that a company that has become embroiled in a $15 billion bankruptcy lawsuit can get itself into much worse trouble if it continues to raise too much money. The New York Times calls the entire situation “a case of greed, political intrigue and insider trading.”„ We’ll be damned if a bad name gets filed.„ On July 23rd, the SEC fined us $1.25 billion. That last amount is for the cost of the deal to get on the market. The SEC doesn’t seem to understand the SEC is involved.„ The SEC’s report has never mentioned the reason a company had to buy shares and put a $1 billion deposit on its $15 billion class action lawsuit.„ However, the SEC has just approved the $6.75 billion settlement — an even bigger deal than the $12 billion that came in from some of the stock options that the class action lawsuit and other investors paid out.‟ Lazard is no stranger to the “informational risk.” In 2009 it put up a $250 million bond that was only put up for auction by a public company. ‟ At that time, it didn’t like the deal’s structure so it sold stock at a premium to the SEC settlement. We’re talking about selling one of those two different company stock options that an insurance company might be buying for a million dollars, or $1000 in shares, or a few thousand dollars in shares, to
Jyothy LaboratoriesJyothy Laboratories Limited (JLL) came into being in 1983, powered by the vision of one man, M P Ramachandran, the current Chairman and Managing Director. Jyothy started as a proprietary concern, manufacturing and selling a single product in a single district and has grown to become a multi-brand and multi-product company with operations all over the nation. In keeping with the tenet of offering a solution rather than a product, JLL has consciously ventured into product categories that provide simple but tangible benefits to consumers through a portfolio of value for money brands. JLL makes fabric care products, household insecticides, surface cleaning soaps, personal care products and air purifiers.
Initial Public Offering and Limited Product LineThe main objective of issue is to dilute equity holdings by venture capitalists. The companys flagship brand Ujala liquid fabric whitener is available in 2.8m outlets in India. JLL has established a distribution network across India with a sales staff of over 1,500 people servicing 2,500 distributors. Its products are manufactured through 21 facilities in 14 locations across India, 8 of which are in tax-exempt units. Heavily depend on two biggest brands, Ujala and Maxo which contribute 43.6% and 35.4% of its total sales respectively. JLL relies on outsourced production through third parties. Any disputes or disagreements may affect its business. The company is susceptible to seasonal variations in demand for its products.
Rohan A. Krishnan, Vice President, PVS Lending, told Minting News on condition of anonymity that the company’s brand, JLL, will have a lower initial public offering price over the first quarter. According to a press release sent to Minting News, which quoted Shabnam as saying that it is going on a “longer and more ambitious plan, without any loss or inconvenience for its shareholders as a result of its recent decline”. It is said that JLL, whose shares have doubled in value from Rs 12.6 lakh crore in September 2012, reported a loss of Rs 8,715 crore in the quarter ended June 30. This is despite JLL’s success in gaining market share in domestic markets such as the US and the euro. The company did not mention that it is now also eyeing a bigger expansion of its online sales, which it plans to offer to its shareholders in the coming months, a plan that will see it raising Rs 1.4 lakh crore.
However, Rishi Prakash, chairman and global head, JLL said that the company will continue to invest in international brands for the foreseeable future. He said:
“JLL is a leading global brand after offering in many different Indian cities on smartphones like Moto G and LG G Watch, along with three smartphones in India in 2014. It’s also been investing in a number of brand-new products around the globe, such as the smartwatch, Android Wear and the smart sunglasses. Our main focus is now on other international activities such as international banking, e-commerce and our e-mail and messaging services. We think the Ujala brand will do fine in 2016 if our plans are in place.”
JLL shares dropped by 2.16% in aftermarket trading and gained around $50,000 to nearly Rs 10,500 while Ujala closed up over 2.16% in aftermarket trading.
Fujitsu has been holding off on issuing JLL branded products in a bid to avoid disruption of its sales, however, it now plans to raise the purchase price of 100 million yen ($10 million yen) it has already received from another company.
This article was first published on Minting News.
Jyothy Laboratories Limited acts on key insights from consumers, market research and sustained in-house analytical processes.