March 29, 2023
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Rothschild & Co. withdraws from the Paris stock exchange

The big drop in mergers and acquisitions, interest rate hikes by central banks and economic uncertainty are partly to blame for Rothschild & Co.’s decision to withdraw from the Paris stock exchange. The investment bank, which has charted a 200-year course and is currently valued at 3.7 billion euros, says in its announcement that its activities are better evaluated based on long-term returns than short-term profits.

Concordia, the Rothschild family holding company that owns 38.9% of the shares and 47.5% of the voting rights in Rothschild & Co., said it is in talks with banks and investors to finance a bid. According to information in the international press, it intends to offer 48 euros for each share, a price that is 19% higher than last Friday’s closing.

This results in a valuation of 3.7 billion euros, including a dividend of 1.4 euros per share and an extraordinary distribution of 8 euros per share. On Monday, the share price moved steadily at 47 euros. Since the beginning of the year it has registered an increase of more than 26% and in the last 12 months it has strengthened more than 25%.

Four years ago, David René de Rothschild handed over the reins to his son, Alexander, who represents the seventh generation of bankers to run the investment bank. With this change, Rothschild & Co seeks to diversify away from its core business, which is providing services in France and Britain, and expand into the US, where it focuses on the private equity sector. Of course, David’s father remains as chairman of the supervisory board at the bank, whose assets under management amounted to 98.6 billion euros at the end of the third quarter of 2022.

The Rothschilds adjusted their business model according to the circumstances. David de Rothschild founded Rothschild & Co 11 years ago through the merger of the family investment bank in France with the merchant bank NM Rothschild & Sons in Britain, which was headed by Sir Evelyn de Rothschild until 2003.

As reported by the Financial Times, Rothschild & Co recorded revenues of €864 million in the third quarter of 2022, up 30% from a year ago. In detail, revenue from consultancy services rose 18% to £547m, but management warned this year would be difficult. Last year he provided advisory services to the public listing of Porsche following a decision by Volkswagen, the acquisition of Partner Re by Covea for 9 billion dollars and the nationalization of Uniper.

It is worth noting that Sir Evelyn de Rothschild passed away last November at the age of 91. He was widely known for his services to the royal house of the United Kingdom. Throughout his long career he maintained close contact with Queen Elizabeth II and is said to have been a frequent visitor to St James’s Palace, Clarence House and Ascot Racecourse. He managed to expand the boundaries of the banking dynasty by growing NM Rothchild from a £400m investment house to a £4.6bn multinational finance company, serving as chief executive and chairman from 1976 to 2003.

Rothschild & Co is a separate entity from Edmond de Rothschild, which operates in asset management and is based in Geneva. In 2018, the two sides reached an agreement on the use of the family name.