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Rothschild & Co: bid for weak stock pulls a reverse Goldman Sachs

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France’s most prominent independent investment bank plans to reverse the ownership structure copied by Goldman Sachs when it went public in New York in 1999. The Rothschild family is planning to buy the Rothschild & Company cited in Paris.

Everything we do can be viewed as unspoken criticism of those who don’t. But unlike Goldman’s previous partners, the branch of the famous European banking dynasty, headed by David de Rothschild, is unwilling to use outside capital or pay banks with listed shares. Instead, we want to tighten control.

Lesser known businesses will be more so. Discretion is in the DNA of the Rothschild family. Consensus is sometimes less obvious. The acquisition brought the bank’s value to his €3.7bn and reduced the distribution of the bank’s voting power, now in the seventh generation of the family business under David’s son Alexandre.

A new push is expected for wealth management and personal wealth, which currently account for half of banking activity. Chatter may reemerge over a merger with another Swiss private bank, Edmond de Rothschild.

sooner Acquisition of Rothschild & Co. It will remove the shield stain represented by the disastrous share rating. Stocks are trading near historic highs. However, due to low liquidity, a unique local position and a weak US foothold, the futures price/earnings ratio is only 5.5x. That’s 11 to 12 times higher than New York-listed Lazard, Evercore and Goldman, according to S&P Capital IQ.

The family holding company offers €48 per share, including a dividend of €1.4 and a special dividend of €8. The 3-month premium to the stock price is a healthy 30% ex-dividend. The family car Concordia holds 47.5% of the voting rights, with a fifth held by a close relative.

It rules out competing bids, if not hedge fund clashes. As valuation experts, Rothschild bankers must be keenly aware that Concordia bids are high and low at the same time.

The Lex team would love to hear more from our readers. Let us know what you think of the Rothschild & Co buyout bid in the comments section below.

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