Some of Europe's wealthiest families join forces to take the Rothschild & Co bank private

In a typically bold move that further defines the Rothschilds as a multi-generational international banking family of significant foresight, the French branch of the family are aiming to take their Paris-listed investment bank, Rothschild & Co, private.

Concordia, the family-owned holding company and Rothschild & Co's largest shareholder, has announced its intention to file a tender offer for the remaining 45% of shares they do not already own (at €48 euros per share, including dividends). What’s more, the Rothschilds have recruited some of Europe’s wealthiest families to solidify the deal.

Joining the take-private plan alongside the Rothschild family as long-term stakeholders are the Dassault family, who have interests across media, software, wine production and aviation through Groupe Industriel Marcel Dassault, and Italian multi-generation family member and health entrepreneur Giammaria Giuliani (both of whom were already investors in Rothschild & Co).

Also, taking part in the venture are Etablissement Peugeot Freres, the holding company of the car firm-owning Peugeot family; Mousse Partners, family office for the Chanel-owning Wertheimer brothers; and Hannah Rothschild, the daughter of Jacob Rothschild, who broke with the British branch of the family in the late 2010s to pursue his own interests.  

“The idea for the family is to take the group completely private and to do so with investors with a similar frame of mind, who have a family-oriented and long-term perspective,” said François Pérol, managing partner of Rothschild & Co, to the Financial Times.

In return for their investment, these families would end up holding around 5% of the investment bank each and would be locked into the shares for at least eight years.
 

These are families that all have a relationship of trust with the Rothschild family for different reasons.

“What brings together all of these investors is that they are long-term investors and that they share the same beliefs about the development of a company like ours,” said Perol in a statement. “These are families that all have a relationship of trust with the Rothschild family for different reasons.”

Founded in the 1760s by Mayer Amschel Rothschild, the head of a wealthy Ashkenazi-Jewish family who started out by buying and selling old coins in a Frankfurt ghetto, Rothschild & Co was restructured in 2012 following a merger between the-then separate French bank and UK merchant bank NM Rothschild & Sons. In 2019, David de Rothschild passed on the mantle of Rothschild chair to his son and seventh-generation family business leader Alexandre.

After five years in the leadership role and coming three months after the death of former British banking group head Evelyn de Rothschild at the age of 91, Alexandre de Rothschild is the driving force behind the move to take the bank private, recently saying it had “Reached the limit and full potential of the listing [and that it was] much better suited to being a private company.”

Concordia has said that none of Rothschild & Co’s three divisions - global advisory, merchant banking, and wealth and asset management - need access to public capital, so moving private made more sense.

“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,” said Rothschild & Co in a statement of the take-private plan, which will be submitted to shareholders along with a €1.4 billion dividend offer at its next annual general meeting on May 25.

The proposed deal, which Concordia will also partly look to bank loans to finance, was revealed as Rothschild & Co reported its financial results for 2022, in which overall group revenues grew one per cent to €2.96 billion.

“We’re expecting our businesses to continue to perform well but below 2022 levels, linked to a slowdown in mergers and acquisitions in a very uncertain macroeconomic climate,” said Pérol referring to the bank’s continuing focus on organic growth. “It’s always hard to see more than six months ahead in this sector but the first semester will be weaker.”

Over the past year, Rothchild & Co (which includes French President Emmanuel Macron as a former employee) has worked on Volkswagen’s initial public offering of Porsche, Covea’s $9 billion acquisition of PartnerRe and the nationalisation of German energy group Uniper.