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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