Tonight:
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AS he enters the Pearly Gates, it's tempting to think of Bruce Wasserstein, the Wall Street banker, who died yesterday, sizing them up for an asset play.
Often, the word “legend” is overdone. But Wasserstein was the real deal. His speciality was the takeover that was so enormous in scale as to be inconceivable.
Of course, there was M&A pre-Wasserstein, but his legacy was to make the markets believe that virtually anything was possible.
Whereas previously there had been mergers between consenting parties and the occasional hostile intervention, Wasserstein raised the bar — with the result that no listed company, no matter how big, could ever feel entirely safe.
Texaco's purchase of Getty Oil, Time's acquisition of Warner and, most famously of all, the buyout of RJR Nabsico, enshrined in Barbarians at the Gate — these were takeovers that took deal-making to another level.
Involving huge sums of borrowing — with vast fees for Wasserstein and his mates — they altered the business landscape.
His speciality was goading on his clients, to make them pay more than they originally intended, hence his “Bid em Up” nickname. The “Pac-Man defence”, where a victim turns and gobbles the predator, was a Wasserstein invention. Aggressive use of public relations was another favourite Wasserstein ploy.
That's not to say his contribution was entirely positive. Companies were frequently left burdened with colossal debts and later it might be unclear as to whether the merger was actually of any lasting benefit.
He'd been quiet by his standards for a while but popped up recently, guiding Kraft in its bid for Cadbury. Kraft and its advisor, Lazards, maintain Wasserstein's death won't make any difference as to how they proceed, but there's no doubt something has been lost.
He liked to deliver a “dare to be great” speech before a client made their final offer.
While others trembled at his audacity, he could see nothing wrong — after all, he'd been doing it all his life. When Bruce and his sister Wendy were children, they would play Monopoly. Bruce, though, liked to rewrite the rules so players could supplement their cash by borrowing from the bank and each property was allowed to contain up to three hotels rather than the usual limit of one.
It was pure Bruce, and for that he will be missed.
Reader views (2)
I agree with Mr. Lynch. I seem to remember he cajoled a Canadian mogul Robert Campeau a few years ago to acquire an extensive department store empire, using massive amounts of debt, which was clearly unsustainable. The inevitable happened ie. the whole group collapsed under the weight of its borrowings, and in the ensuing insolvency, thousands lost their jobs. Oops. I wouldn't have been surprised if bruce had a stake in the deal, but got out while the going was good!
- Jonathan Charles, London, 15/10/2009 16:00
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Whilst brilliant, he was the worst sort of cynical investment banker who only encouraged his clients to increase their offer to a knock-out level, so that the deal would get done and he would take his massive 'success' fee. That said, if Boards of Directors were stupid enough to be taken in by this guff, and many were, that's their problem (or, rather, the problem of their shareholders).
- Kevin Lynch, Dublin, 15/10/2009 12:53
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