Concordia is expected to file a tender offer to purchase Rothschild & Co’s shares at €48 per share, plus an ordinary dividend of €1.4 per share, along with a potential exceptional distribution of €8 per share

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Concordia will purchase Rothschild & Co shares. (Credit: Rock Staar on Unsplash)

The Rothschild family is preparing to take its French investment bank Rothschild & Co private, in a deal worth about $4bn, which is a 19% premium to its last closing stock price.

Concordia, the financial dynasty’s holding company and majority shareholder of Rothschild & Co, will file a tender offer to purchase its shares at a price of €48 per share, plus dividends.

The company proposed to pay the shareholders an ordinary dividend of €1.4 per share, paid on 31 May 2023 with an ex-dividend date on 29 May 2023.

In addition, it has announced an exceptional distribution of €8 per share, subject to the favourable opinion of the Rothschild & Co Supervisory Board.

Concordia said that the filing of the proposed offer is subject to receipt of various regulatory approvals, and will seek a squeeze-out once the offer is filed.

The company will file the tender offer with the Autorité des marchés financiers, the French financial and markets regulator, at the end of the first half of 2023.

Concordia, in its statement, said: “None of the businesses of the Group needs access to capital from the public equity markets.

“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.

“This offer price of €48.0 per share with dividends attached, would reflect a premium of 19% over the closing share price on 3 February 2023 and a premium of 27%, 34% and 36% respectively on the volume-weighted 60, 120, and 180-day average share prices prior to that date, as well as a premium of 15% compared to the all-time high price of Rothschild & Co shares, reached on 13 January 2022.”

Rothschild & Co has grown beyond pure advisory for mergers and acquisitions into wealth management, private equity, and debt financing firm, in the last three decades, reported Reuters.

Rothschild family owned nearly 55% shares of the investment bank and 69% of its voting rights at the end of last year, with a 39% stake in the company held through Concordia.

Currently, Concordia is in advanced talks with bank investors to secure financing for the transaction, said the publication.

Furthermore, Rothschild & Co’s Supervisory Board has formed an ad hoc committee and appointed financial advisory and audit firm Finexsi as an independent expert.

Finexsi is responsible for delivering a report containing a fairness opinion on the financial terms of the tender offer and on the exceptional distribution.