Investors, thank you. You are no longer needed – from now on we prefer to do without you. That’s the point of one communique that Concordia, the holding company of the renowned Rothschild banking family, issued Monday in Paris. The family branch behind investment bank Rothschild & Co, led by Alexandre de Rothschild, is delisting the bank.
More than two centuries after Mayer Amschel Rothschild, the son of a Frankfurt Jewish merchant, began a successful career as a financier, the Rothschilds are strengthening control of their own company. Rothschild & Co, formed in 2003 from a merger between the family’s French and British banking houses, has a strong position in assisting M&A, particularly in the European market. In addition, Rothschild & Co has become increasingly active in asset management and private equity.
Business is progressing so well that none of the bank’s parts “need access to capital from the stock markets,” the Concordia statement said. In addition, ‘long-term performance’ is more important than ‘short-term results’. Private property is therefore “more suitable” for the business than a stock exchange listing, the family says.
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Shareholders receive a nice parting gift. Concordia, which owns 38.9 percent of the shares and 47.5 percent of the voting rights, offers EUR 48 per share plus a special dividend of EUR 8 per share, plus a regular dividend of EUR 1.40. If French regulators approve the exit from the Paris stock exchange, investors will make a 19 percent gain over Rothschild & Co’s stock price last Friday. Compared to the price of 180 days ago, this is a 36 percent profit.
Negotiations with major investors are at an “advanced” stage, the statement said. In response to Monday morning’s news, the share price rose by 17 percent, to almost the level of 48 euros that Concordia offers.
Banking family history
Rothschild & Co is a creation of David de Rothschild, father of current CEO Alexandre. In 2003 he forged the sometimes rival British bank NM Rothschild & Sons and the French Rothschild & Cie Banque together. Current French President Emmanuel Macron worked for the bank under CEO David. A previous French president, the socialist François Mitterrand, nationalized France’s Rothschild bank in 1982. David simply set up another bank with family capital, initially under the name of Paris Orléans, because the Rothschild label had been feeling for some time after the nationalization. Partly due to the skillful and discreet operation of David de Rothschild, the bank quickly built up a leading position in the Parisian market. high finance. In London, NM Rothschild & Sons, managed for many years by Sir Evelyn de Rothschild, was Queen Elizabeth’s house bank, among other things.
For now, once delisted, Rothschild & Co will face other challenges
In the Financial Times there is speculation about a next step in the family’s history: the merger of Rothschild & Co with another bank within the dynasty: Edmond de Rothschild Group, based in Geneva and specializing in wealth management for the wealthy. This bank is led by Ariana de Rothschild, wife of Benjamin, cousin of David.
Until 2018, Ariana had been in conflict with David about the naming of the Parisian bank: Ariane thought that David should not just call his bank ‘Rothschild’, without a first name, because he would not have the exclusive right to the legendary quality mark. After threats against top lawyers, a settlement was negotiated: from now on, ‘& Co’ had to be added to e-mails and web addresses of the Parisian bank as well.
For the time being, once delisted, Rothschild & Co will face other challenges: due to the deteriorating stock market climate, as with almost all investment banks, income from mergers and acquisitions has declined. The bank will publish its annual figures on 13 February.
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