Credit Suisse creates investment behemoth

AXA to sell Gotham investment bank Donaldson, Lufkin

Investment bankers are usually the ones arranging other companies’ mergers, but two of Wall Street’s biggest players Tuesday were poised to combine their own firms in an $11 billion-plus transaction arising from continued consolidation in the financial sector.

Paris-based insurance group AXA was set to announce the sale of its New York investment bank, Donaldson, Lufkin & Jenrette, to the parent of Street rival Credit Suisse First Boston. Both investment firms have had extensive dealings with entertainment and media companies over the years, and their combination would continue a trend that’s already created financial powerhouses such as Morgan Stanley Dean Witter and Citigroup.

Three firms — Morgan Stanley, Goldman Sachs and Merrill Lynch –now control more than 50% of all underwriting and mergers and acquisitions business. But in M&A activity alone, a DLJ-CS First Boston combo would rank No. 3.

Another big firm, Lehman Bros., had reportedly also been interested in acquiring DLJ, but AXA and CS First Boston parent Credit Suisse Group of Zurich are expected to announce as early as this morning a deal in which DLJ shareholders would get about $90 a share. That would represent a 36% markup over Monday’s closing price, with takeover speculation sending DLJ shares higher Tuesday to close at $84.

Some shareholders would get cash, and others cash and Credit Suisse stock.

H’wood, Web dealings

Other banks have tended to lead the biggest deals involving underwriting syndicates for entertainment and media transactions, But DLJ and CS First Boston have been active participants as well.

Earlier this month, DLJ made a business acquisition of its own, buying the Advanstar trade shows company in a mostly cash deal valued at $900 million. Advanstar’s events include an annual trade show by the Video Software Dealers Assn.

DLJ is currently helping video retailer Hollywood Video look for strategic business partners, and this spring it participated in a financing for Netco Underground Online. And last year it led a $100 million insurance-backed securitization on behalf of fledgling producer Destination Films.

CS First Boston was among secondary underwriters on an initial public offering for homevideo giant Blockbuster last year and recently announced a partnership with Variety to stage “The Front Row” media and entertainment conferences in New York and elsewhere (Daily Variety, Aug. 21).

DLJ was founded as a research boutique in 1959 by Harvard classmates William Donaldson, Daniel Lufkin and Richard Jenrette. It went public in 1970, the first Wall Street firm to do so.

DLJ, which had revenue of $7.15 billion in 1999, employs about 8,150 people worldwide and is well-known for high-yield bond underwriting and trading.

Credit Suisse First Boston Group focuses on investment banking, underwriting and private equity transactions, without much brokerage staff. Company operates in 37 countries and has more than 15,000 employees. It had revenue of $9.8 billion last year.

(Dow Jones and Bloomberg News contributed to this report.)

More Biz

  • Terry Wakefield Exits Sony/ATV to Head

    Terry Wakefield Exits Sony/ATV to Head Up A&R at UMPG Nashville

    After a decades-long tenure at Sony/ATV Nashville, Terry Wakefield has followed another alumnus, Troy Tomlinson, across town to take a top position at Universal Music Publishing Group Nashville. Wakefield is senior VP of A&R at UMPG after having been senior VP of creative in his previous post. Personal loyalty to Tomlinson, UMPG Nashville’s recently named chairman/CEO, [...]

  • Sally Williams at PBS Country Music

    Sally Williams to Leave Longtime Opry Home for Top Post at Live Nation in Nashville

    Nashville executive Sally Williams is leaving Opry Entertainment, where she rose to the top over a two-decade tenure there, to join Live Nation’s regional office as the president of Nashville music and business strategy, the company announced Monday. Live Nation said Williams will not only lead programming and marketing for their concerts in the area, [...]

  • Fourward

    Management Company Fourward Taps Christopher Burbidge as Head of Talent Division

    Will Ward’s management company Fourward has promoted long-time colleague Christopher Burbidge to head the company’s rapidly growing talent division, while also promoting Brooke Blann to manager in the company’s music division. Both Blann and Burbidge are based in the company’s Los Angeles office and will continue to report directly to Ward. Burbidge works closely on [...]

  • Writers vs Agents Packaging War WGA

    Kaplan Stahler Agency Signs Modified Code of Conduct in Win for WGA

    Kaplan Stahler has become the latest agency to sign the Writers Guild of America’s (WGA) modified code of conduct in a win for the Guild. In a message sent out to WGA members today, the negotiating committee wrote that the agreement with Kaplan Stahler “bans packaging fees and agency-affiliated production companies and, through information-sharing, makes [...]

  • London's CODA Agency Formally Becomes a

    Paradigm Agency Formally Absorbs London's CODA Into the Fold

    After five years of working together, London’s CODA Agency has formally become a part of Paradigm and will continue under its U.S. partner’s banner. The London office of what is now a fully integrated Paradigm will continue to be led by Alex Hardee, Tom Schroeder, James Whitting and Dave Hallybone. In a statement otherwise laden [...]

  • WGA Agents Dispute Placeholder

    Agencies Seek to Hold Key Court Hearing Before WGA Elections

    The four major agencies asked a court on Monday to expedite a key hearing in the Writers Guild of America lawsuit, as the agencies seek to have portions of the case thrown out before the WGA’s internal elections in September. The WGA and the unions are still waging a legal and public relations battle over [...]

  • Sonja Plack Cocaine Possession

    'The Chi' Actress Sonja Sohn Arrested on Cocaine Possession Charge

    Sonja Sohn, the actress who appears on “The Chi,” was arrested over the weekend in North Carolina on a charge of cocaine possession. Sohn, best known for portraying Det. Kima Greggs on “The Wire,” was booked and released from the Dare County Detention Center in Manteo, N.C., according to a statement from the Dare County [...]

More From Our Brands

Access exclusive content