Julius Baer, EFG stopped takeover talks after initial approach, sources say (updated)

EFG International AG

24/05/2024 20:18

(Adds analyst comment in last two paragraphs)
    By Oliver Hirt and Jesús Aguado
       ZURICH/MADRID, May 24 (Reuters) - Swiss private bank
Julius Baer  BAER.S  held talks with EFG International  EFGN.S 
about a potential takeover in recent months but the discussions
have stopped, people with knowledge of the matter told Reuters.
    The two Swiss banks were in talks around the time Julius
Baer ousted its chief executive officer Philipp Rickenbacher in
February, after losses on loans to failed property firm Signa,
the people said.
    Julius Baer considered EFG's CEO Giorgio Pradelli as a
potential head of a combined entity as part of the takeover
deliberations, the people said.
    However, the banks have recently stopped talking, the people
said. Reuters could not establish the reason for the talks
halting. Julius Baer is focusing on appointing a permanent CEO,
a process which will likely take more time, one of the people
and a third person said.
    It was unclear whether Pradelli is still under consideration
for the Julius Baer role, the people said.
    Spokespeople for the two companies declined to comment. 
    Bloomberg News earlier on Friday reported that Julius Baer
is exploring a potential acquisition of EFG, citing people with
knowledge of the matter.
    EFG has a market value of about 3.8 billion Swiss francs 
($4.16 billion) while Julius Baer is valued at about 11.5
billion francs. 
    Strategically, a combination is questionable, RBC analysts
wrote in a note to clients. Baer has been investing and the
additional challenge of integrating EFG would raise questions,
the analysts wrote. 
    Culturally there are also likely to be some differences in
the private banking franchise, the analysts said. 
    "Including synergies we calculate that a deal could be EPS
neutral by 2026," said the note.

($1 = 0.9140 Swiss francs)

 (Reporting by Oliver Hirt in Zurich and Jesus Aguado in Madrid.
Additional reporting by Stefania Spezzati. Editing by Anousha
Sakoui and Elisa Martinuzzi)
 ((oliver.hirt@thomsonreuters.com))