Rothschild family privatizes bank in $4 billion deal

(Bloomberg) – The Rothschild family is planning to buy its eponymous French bank in a deal worth around 3.7 billion euros ($4 billion), ending decades of public ownership of one of the most famous names in the global financial sector.

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The family holding company, Concordia, is planning a public offer to buy shares of Rothschild & Co at 48 euros per share, 19% higher than Friday’s closing price, according to a statement today. Monday. The holding already owns 38.9% shares of the company and 47.5% voting rights.

Rothschild shares rose 17% to €46.9 at 10:49 a.m. in Paris trading.

“None of the businesses in the group needed access to capital from the public equity markets,” Concordia said in a statement. “Furthermore, each business is better valued on the basis of their long-term performance rather than short-term earnings. This makes the group’s private ownership more relevant than the public listing.”

The proposal came three months after Evelyn de Rothschild, the former head of the British bank, died at the age of 91. Evelyn and her cousin David de Rothschild, who oversaw the French branch, merged the two branches. in a move seen as an important step in remaining competitive with much younger – but also larger – multinational banks.

Today, Rothschild & Co. led by Alexandre de Rothschild, son of David. The Paris-based company has expanded its footprint in the US in recent years. It has performed relatively well despite the recent drop in the trading advisory market. The company ranked sixth globally for the number of mergers and acquisitions advised last year, according to data compiled by Bloomberg.

The lender intends to pay a dividend of €1.4 to shareholders at its next annual meeting on May 25. The company will also propose a special dividend of €8, should Concordia decide to submit an offer. . The price of the offer will be adjusted down to that amount.

Concordia, which is currently in advanced negotiations with investors and banks to finalize financing of the deal, intends to submit an offer by the end of the first half of 2023.

The Rothschild Company was founded by Mayer Amschel, who started buying and selling old coins in a slum in Frankfurt. In the early 1800s, he sent his five sons to establish Rothschild facilities in London, Paris, Naples, Vienna and Frankfurt. Among its many other roles, the banker today is known as Rothschild & Co. helped finance the Duke of Wellington’s victory over Napoleon in 1815 at the Battle of Waterloo.

The name Rothschild has been at the center of disputes between the clans for many years. In 2018, the company settled a longstanding disagreement with asset manager Edmond de Rothschild (Suisse) SA, managed by another branch of the family, over the use of the name. As part of that deal, the two companies agreed to cancel their cross-ownership of shares.

(Updated with Concordia comment in fourth paragraph, context from Thursday.)

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