Bull Bear Report Jul 06 2011

Lazard to Lose Major Rainmaker

By mark kleinman

The investment banker who led the controversial 12 billion pound takeover of Cadbury is poised to resign from his job at one of the City's leading advisory firms, I have learned.

Peter Kiernan, who has been a managing director in Lazard's mergers and acquisitions department for about seven years, is expected to leave later this year.

His resignation comes a year after Kraft Foods was censured by the Takeover Panel, which regulates bids, over statements implying that it would retain a British Cadbury manufacturing facility if it succeeded with its offer. Shortly after winning control of the UK company, it reversed its commitment, prompting political outrage.

The embarrassment of that u-turn was especially acute for Kiernan, who had agreed to join the Takeover Panel as its director-general but had to change his mind following the public criticism of his client.

Irene Rosenfeld, Kraft's chairman, has faced particular criticism for refusing to appear before MPs to explain the company's decisions about future investment in Cadbury.

Kiernan, who was unavailable for comment this morning, is understood to be considering a number of options for future employment.

He is expected to complete a series of assignments for clients, including the sale of V Ships for Exponent Private Equity, before leaving Lazard.

A respected banker, Kiernan had originally been due to take up the Panel role in December 2009, which the watchdog agreed to defer until after the Cadbury situation had concluded. Robert Gillespie, another senior investment banker, took the post in Kiernan's place.

The takeover of the British confectioner has prompted potentially far-reaching changes to the way mergers and acquisitions are regulated, with a series of new rules due to come into effect in September.

These will include shortening the timetable for predators to bid for their targets, disclosing the identity of offerors at an earlier stage, and banning inducement fees in most situations.

Sir Roger Carr, the former Cadbury chairman, has been an advocate of the rule-changes, which some M&A bankers and lawyers argue will stifle an already-subdued market for deals.

Lord Mandelson, who as Business Secretary was another vocal critic of the Cadbury takeover, has since joined Lazard as an advisor.

Lazard declined to comment.

Mark Kleinman is a reporter for Sky News. This story originally appeared on Sky News and is on FINS courtesy of NewsCore.




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