Rothschild Family to Take Bank Private in $4 Billion Deal

(Bloomberg) — The Rothschild family is planning to take its eponymous French bank private in a deal that values it about €3.7 billion ($4 billion), ending decades of public ownership for one of the most storied names in global finance.

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The family’s holding company, Concordia, is planning to file a tender offer for Rothschild & Co’s shares at €48 apiece, a premium of 19% over the closing price on Friday, according to a statement Monday. The holding already owns 38.9% of the firm’s shares and 47.5% of the voting rights.

Rothschild’s shares rose 17% to €46.90 at 10:49 a.m. in Paris trading.

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

Read more from Bloomberg Opinion: The Rothschilds Are So Done With the Markets: Chris Hughes

The proposal comes three months after Evelyn de Rothschild, the former head of the British arm of the banking group, died at age 91. Evelyn and his cousin David de Rothschild, who oversaw the French arm, united the two branches in a move that was seen as a key step in remaining competitive with much younger — but also bigger — multinational banks.

Today, Rothschild & Co. is led by Alexandre de Rothschild, the son of David. The Paris-based firm has been expanding its footprint in the US in recent years. It has fared relatively well despite a recent slump in the market for deal advisory. The firm ranked 6th globally by the number of mergers and acquisitions advised on last year, according to data compiled by Bloomberg.

The lender intends 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.

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

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. Among its many other roles, the bank known today as Rothschild & Co. helped finance the Duke of Wellington’s victory over Napoleon in 1815 at the battle of Waterloo.

The Rothschild name has been the center of dispute between branches of the family for years. In 2018, the firm settled a long-running disagreement with wealth manager Edmond de Rothschild (Suisse) SA, which is managed by a different branch of the family, over the use of the name. As part of that deal, the two companies agreed to unwind their cross-shareholdings.

(Updates with Concordia comment in fourth paragraph, context from fifth.)