Three of France’s wealthiest dynasties including the owners of luxury giant Chanel are investing in Rothschild & Co. to help take the eponymous French bank private.
(Bloomberg) — Three of France’s wealthiest dynasties including the owners of luxury giant Chanel are investing in Rothschild & Co. to help take the eponymous French bank private.
The Dassault, Peugeot and Wertheimer families, along with Giammaria Giuliani of Italy, will back the offer by the Rothschilds’ holding company Concordia of €48.0 per share, reflecting a valuation of about €3.7 billion for the historic firm, according to a statement Monday. They’ll also be joined by the Maurel family, shareholders in the bank stemming from its previous merger with their wealth management company, and other members of the Rothschild clan.
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. The families investing in Rothschild & Co. to take it private are among the most storied names in French capitalism, with the Dassaults’ fortune rooted in defense and aviation, the Peugeots in automaking and the Wertheimers in a luxury brand best known for tweed suits and Number 5 perfume.
“They share the same convictions toward development of a company like ours,” Francois Perol, a managing partner, said on a call with reporters. “These families all have relationships built on trust with the Rothschild family for different reasons.”
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 Rothschilds to cement control over the Paris-based firm. The “like-minded” investors backing the deal will be locked in for eight years, according to the statement.
Rothschild & Co. generates the majority of its revenue from financial advisory work, 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 confirmation of the offer details, the bank published full year net income that beat analyst estimates. Still, it expects a weaker start to 2023 after economic headwinds hit deal making and announced transaction levels toward the end of last year. This year’s performance is set to be below 2022.
Going forward, Perol said the bank would continue to focus on organic growth.
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 and were at €46.95 in early trading in Paris on Tuesday.
Following the de-listing, which could come at the end of August, Concordia would hold about 55% of the bank’s capital, the long-term investors about 35% and the bank’s partners would have about 10%, according to Perol.
The Dassault family has investments through its Groupe Industriel Marcel Dassault, which has holdings in fighter-jet maker Dassault Aviation and design software company Dassault Systemes as well as the Figaro newspaper, Artcurial auction house and wine estates. They already had a stake of about 2% in Rothshild & Co. through GIMD.
Read more: Billionaire Dassault Clan Grapples With Succession Deadline
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. Peugeot Invest said it could acquire as much as 5.1% of Rothschild & Co. and take a seat on the supervisory board, according to a statement.
The billionaire Wertheimer siblings Alain and Gerard behind Chanel have a family office called Mousse Partners run by their half brother Charles Heilbronn. The firm, which will invest in Rothschild & Co., uses the proceeds from London-based Chanel Ltd., whose Cayman Islands holding company is called Mousse Investments Ltd.
Giammaria Giuliani’s fortune is rooted in the invention by his great-grandfather of a herb-based remedy to help digestion about 130 years ago in his native Italy. Both his investment vehicle and the Dassaults are intending on holding about 5% of the Rothschild bank, the statement said.
Family Branches
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.
Among the investors backing the bank is a member of the UK Rothschild family’s branch, Hannah Rothschild. An author and documentary filmmaker, she is one of the children of Jacob Rothschild, who broke with the family to pursue his own interests.
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. The so-called enlarged family concert of investors that includes Concordia also has Edouard de Rothschild, who is also listed as an investor in the take-private move.
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 the middle of this year.
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.
(Adds outlook for 2023 in seventh paragraph, shares in eighth.)
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