Lazard as a Raider

Lazard's support of Carl Icahn's proxy contest to oust Time Warner's board has tongues wagging on Wall Street.  The conventional wisdom: Main line Wall Street investment banks do not support raiders; they support blue-chip corporate clients defend against raiders.  Will blue-chip companies continue to use Lazard??  Lazard reported record fourth-quarter profits yesterday, beating Wall Street estimates by a considerable margin.  Lazard stock rose 6 percent on the news.  What is important about the discussion is that so few traditional funding sources will back expensive proxy contests or takeovers.  Takeover law has made hostile takeovers very difficult, too difficult.  We would not be worrying about investment bank support of raiders if takeover regulations eased;  private equity funds would again step up to the plate.  At present private equity is content to fund negotiated (read friendly) LBOs.