The Rothschild family plans to buy shares in Franco-British investment bank Rothschild & Co that it does not already own, in a move that could take the company off the stock market.
Concordia, the family holding company that holds 38.9 per cent shares and 47.5 per cent voting rights, said on Monday it was in talks with banks and investors to finance an offer for the Paris-listed conglomerate.
Rothschild & Company has three divisions: Global Advisory, Wealth and Asset Management, and Merchant Banking. Concordia said none of these businesses require access to capital from the public equity markets and given their long-term nature, it makes more sense for the group to go private.
It said in a statement: “Each business is valued based on their long-term performance rather than short-term earnings. This makes private ownership of the group more suitable than a public listing.”
Rothschild’s origins date back more than 200 years, but the current structure of Rothschild & Co has its roots in the 2012 merger between the then separate French bank and UK merchant bank NM Rothschild & Sons. The deal unified its corporate structure under the French parent group and ended decades of cross-Channel rivalry.
There was a change in the group four years ago, when David de Rothschild stepped aside as Rothschild’s chairman and handed over the reins to his son Alexandre, who became the seventh generation of the family to lead the bank.
Concordia plans to offer €48 per share, a 19 percent premium to Friday’s closing price. Rothschild & Company shareholders will also receive a dividend of €1.4 per share and, if Concordia files its offer, an extraordinary distribution of €8 per share.
The enlarged Rothschild family conglomerate, which includes Concordia, holds 54.5 percent of the share capital and two-thirds of the voting rights of Rothschild & Company.
The company’s shares jumped 16 percent to €46.85 in early trade in Paris on Monday.
Rothschild & Co has worked on some of the biggest deals in Europe over the past year, including Volkswagen’s Porsche IPO, Covia’s $9 billion acquisition of partner Re, the nationalization of German energy group Uniper and satellite operators Eutelsat and OneWeb. Combination is included.
At the end of the third quarter, its wealth and asset management businesses had assets of €98.6 billion.
Rothschild & Co said in a statement that it had “looked into the proposed transaction” and had appointed Paris-based financial advisory firm Finexy as an independent expert to provide a fairness opinion.
Rothschild & Company is a spin-off from Edmond de Rothschild, a Geneva-based private banking and asset management group.
