The Rothschild family has tapped the billionaires behind luxury group Chanel to help take the Anglo-French investment bank private in a deal that will value one of the most famous names in global finance at €3.7 billion. It enlisted some of Europe’s wealthiest families, including siblings.
Concordia, the Rothschild family holding company that controls the bank, said on Monday it would be accompanied by four industrial dynasties. Acquisition of minority shareholders We are also long-term stakeholders in businesses including Global Advisory, Merchant Banking, Wealth and Wealth Management.
Among the major new investors, the Rothschilds primarily tapped the Peugeot family, known for its ties to the car company of the same name. Mousse Partners will manage his Wertheimer brothers’ investment in ownership. Chaneland Hannah Rothschild, a writer and filmmaker who is part of the British side of the Rothschild family.
The French Dassault family has investments ranging from newspapers to aviation, as does Italian entrepreneur Gianmaria Giuliani. will also participate. The Dassaults and Giulianis had already invested in Rothschild alongside Concordia.
François Perol, Managing Partner Rothschild Company“Family’s idea is to keep the group completely private and do it with like-minded investors who are family-oriented and have a long-term view,” he told the Financial Times.
The move to take Rothschild & Co private is the most high-profile move yet by Alexandre de Rothschild, a member of the 7th generation who took over the bank after his father David de Rothschild five years ago. .
The young de Rothschild said in an interview last week that the group had “maximized the limits and possibilities of going public” and that its DNA was “much better suited to being a private company”. .
However, the move raises some questions about valuations. Excluding the additional dividends paid as part of the offer and bringing the offer price to €48 per share, the price is €38.6, below the trading price immediately prior to the announcement of the offer.
Concordia said it will use bank loans, at least in part, to finance the transaction and said it received commitment letters from two lenders on Monday. According to a person familiar with the matter, one of the banks said he is Natixis. Natixis declined to comment.
Industrial investors will each end up with about 5% of the Rothschilds and will be locked into stocks for at least 8 years.
Rothschild’s roughly 100 partners will double their stake in the business to 10% as part of the buyout, while Concordia and so-called family shareholders Concert will hold 60% from their current 54.5%. .
When Rothschild & Co reported its 2022 financial results, details of the non-public transaction emerged, boosting group-wide revenues by 1% to €2.96 billion.
Annual revenues in Global Advisory, the largest division, were down 4% to €1,840 million and profit before tax was down 12% to €372 million. This follows a record year for the global advisory business in 2021, wider slump Rising interest rates and economic uncertainty brought an abrupt end to frenzied activity at the peak of the coronavirus pandemic.
“We expect our business to remain strong, but below 2022 levels, in relation to the slowdown in mergers and acquisitions in a highly uncertain macroeconomic environment,” Perol said. “It’s always difficult to look ahead more than half a year in this field, but the first semester will be weak.”
The slowdown in M&A has forced investment banks such as Goldman Sachs to cut thousands of jobs and slash bonuses as profits plummet.
Pérol said Rothschild & Co would not cut headcount, but the group could cut back on recruitment or stop hiring new people, leaving room to adjust variable pay. “We try to avoid dead-end situations, but that’s not what we do.”
Rothschild & Co’s nearly €100 billion asset and wealth management division saw revenues increase by a fifth to €700 million and earnings by a third to €154 million last year. rice field. The smallest business line, Merchant Banking, saw revenues increase by 2% to €406m and profit before tax decreased by 6.5% to €273m.
