The Rothschilds are in talks with some of France’s wealthiest families, including the Peugeots, to help buy out minority shareholders in its Franco-British investment bank and remove it from the public markets.
Concordia, the Rothschild’s family holding company, said on Monday that it was planning to take its investment bank, Rothschild & Co, private in a move that values one of the most renowned names in global finance at €3.7bn.
It is talking to banks and both current and prospective equity investors to finance an offer for the Paris-listed group. The Peugeot and Dassault families are preparing to invest in the deal, according to two people familiar with the situation. The Dassault family is already an investor in the Concordia holding company.
A person familiar with the Peugeot family’s thinking said the investment would be “in line with their investment policies and [the families] share similar values”.
Concordia owns 38.9 per cent of the shares in Rothschild & Co and plans to increase its stake in the bank to about 50-55 per cent. Under the terms of the deal, the bank’s 100 or so employee partners are set to expand their ownership of the business, which currently stands at 5 per cent.
Rothschild will need to raise about €1bn but wants to avoid doing a traditional management buyout deal that would pile debt on the business, said a person interested in investing in the boutique investment bank.
Rothschild and the Peugeot family declined to comment. The Dassault family did not immediately respond to requests for comment.
The take-private of a business that is best known for its largest global advisory division but includes wealth and asset management and merchant banking follows years of internal debate.
None of these businesses requires external capital and the bank’s leadership felt that its public listing jarred with its long-term mindset.
Alexandre de Rothschild, a member of the seventh generation to run the bank, told the Financial Times this week that the group had “reached the limit and full potential of the listing”. He added: “Our DNA is much better suited to being a private company.”
Rothschild’s listing owes more to a historical accident than a strategic decision. After the bank was nationalised by Socialist president François Mitterrand in 1982, Alexandre de Rothschild’s father David rebuilt the company from scratch.
The elder de Rothschild relaunched his French activities through Paris Orléans, a discontinued French railway company that had been listed on the stock exchange since the 19th century before becoming a holding company for the Rothschilds. In 2015 the family changed the investment bank’s name from Paris Orléans to Rothschild & Co.
The Peugeot and Dassault families’ planned investment was first reported by French business daily Les Echos.