Three of France’s wealthiest families including the owners of Chanel are investing in Rothschild & Co. to help take the eponymous French bank private.
(Bloomberg) — Three of France’s wealthiest families including the owners of Chanel are investing in Rothschild & Co. to help take the eponymous French bank private.
The Dassault, Peugeot and Wertheimer clans, along with the Giuliani family of Italy will back the offer by the bank’s holding company Concordia of €48.0 per share, reflecting a valuation of about €3.7 billion for the historic firm. They will also be joined by the Maurel family who were shareholders in the bank stemming from the previous merger of their finance company with Rothschild & Co.
The bank, predecessors of which helped finance the Duke of Wellington’s victory over Napoleon in 1815 at the battle of Waterloo, announced the outlines of the deal earlier this month. Concordia has argued that the bank’s businesses no longer need access to capital from public equity markets, and the step marks a further effort by the Rothschild family to cement control over the Paris-based firm.
“What is grouping these families together is their long term investment,” Francois Perol, a managing partner, said on a call with reporters. “It’s in the long term that we can best develop the company.”
Rothschild & Co. generates the majority of its revenue from providing financial advisory, though it also has a wealth and asset management unit as well as merchant banking business. Led by seventh-generation scion Alexandre de Rothschild since 2018, the bank has been expanding in the US and managed to sidestep much of the slump in the market for deal advisory, ranking 6th by the number of mergers and acquisitions last year.
Along with the confirmation of the offer details, the bank published full year net income that beat analyst estimates.
Read More: Rothschild & Co FY Net Income Beats Estimates
Concordia said the price per share reflects a premium of 19% over the closing price on Feb. 3. Concordia already owns 38.9% of the firm’s shares and 47.5% of the voting rights. Rothschild’s shares have been trading at close to €47 since the plan was announced.
The Dassault family has investments through its Groupe Industriel Marcel Dassault, which has holdings in fighter-jet maker Dassault Aviation and software design company Dassault Systemes as well as the Figaro newspaper, Artcurial auction house and wine estates. Dassault already had a stake of about 2% in Rothshild & Co. Through GIMD.
Read More: The Rothschilds Are So Done With the Markets: Chris Hughes
The Peugeot family traces its industrial roots to 1810 and first auto to 1889. The clan’s holding company, Etablissement Peugeot Freres has a listed arm, Peugeot Invest SA that has stakes in carmaker Stellantis NV, kitchenware producer SEB SA and scandal-hit elderly care home provider Orpea SA.
The Wertheimer siblings Alain and Gerard behind Chanel, the closely held maker of high-end silk scarves and handbags, have a family office called Mousse Partners run by their half brother Charles Heilbronn. The firm invests the proceeds from London-based Chanel Ltd., whose Cayman Islands holding company is called Mousse Investments Ltd.
Read more: Billionaire Dassault Clan Grapples With Succession Deadline
The going-private move comes three months after Evelyn de Rothschild, the former head of the British arm of the banking group, died at age of 91. The center of power at the lender moved further to Paris under the leadership of his cousin David de Rothschild and now his son, Alexandre.
David de Rothschild’s side of the family has 39.42% of Concordia’s voting rights, while his cousin Eric de Rothschild’s has 55.6%, according to Rothschild’s latest annual report.
Concordia said on Feb. 6 it was in advanced negotiations with investors and banks to finalize the financing of the deal. If the talks are successful, it intends to file its offer by mid 2023.
Rothschild & Co. said it plans to offer a €1.4 dividend to shareholders at its next annual general meeting on May 25. The firm will also propose a €8 exceptional dividend, should Concordia decide to file its offer. The price of the offer would be adjusted downwards by those amounts.
The Rothschild firm was founded by Mayer Amschel, who started out buying and selling old coins in a Frankfurt ghetto. In the early 1800s, he sent his five sons to establish bases of Rothschild in London, Paris, Naples, Vienna and Frankfurt.
Wealth manager Edmond de Rothschild (Suisse) SA is separate from the Paris-based bank and is managed by a different branch of the family.
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