Rothschild holdouts have little chance of a bump

Rothschild & Co SCA

14/02/2023 10:56

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       LONDON, Feb 14 (Reuters Breakingviews) - The dynasty
behind famed investment bank Rothschild & Co  ROTH.PA  has sided
with France’s business elite to buy out minority investors on
the cheap. Family members and their affiliates, who together own
60% of the 3.6 billion euro advisory firm, on Monday
evening confirmed that they would go ahead with a 48 euro per
share offer, partly funded by the owners of luxury group Chanel
and the Peugeot family. Strip out promised dividends, which are
not really part of the price, and the real bid is 38.60 euros
per share - lower than where the Paris-listed stock was trading
before the announcement. The implied equity value for the
company is a lowly 2.9 billion euros, which is about 8 times
forecast 2023 revenue compared with 14 times for closest peer
Lazard  LAZ.N . 
    Any potential holdouts, though, have little hope. The
bidders are targeting 90% ownership, which would allow them to
squeeze out the final 10%. If they miss that threshold, the
Rothschild family can keep whatever shares they get. That means
they could just try the whole thing again next year – but
starting from a higher ownership base. The company’s relatively
small size, and thin liquidity, also makes it unlikely that an
activist investor like Elliott Management will scoop up a large
chunk of the shares to make the family’s life difficult. The
Rothschilds are trying a cheeky move, and it’ll probably work.
(By Liam Proud) 
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 (Editing by Lisa Jucca and Streisand Neto)
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