The Rothschild family plans to merge its French and U.K. banks into one company to tighten control over the assets before an eventual succession of the group’s chief, David de Rothschild.
Rothschild & Cie Banque, the company that holds the French assets of the family such as the eponymous Paris-based mergers and acquisitions bank, and Rothschilds Continuation Holdings AG, which holds assets including London-based bank N.M. Rothschild & Sons Ltd., will be combined under French-traded Paris Orleans et Cie. SA, it said in an e-mailed statement last night. Paris Orleans will change its legal structure to a limited partnership to give the family control over the long term, it said.
“This will enable us to address the requirements of a globalized and competitive world while securing control of the family over the group,” David de Rothschild, 69, who oversees the whole firm, said in the statement.
The decision is part of a unification process between the two branches of the family that started when David de Rothschild took managerial control of the U.K. side of the bank after his cousin Evelyn de Rothschild retired in 2004. While David is the first French national to run the English half, the ownership of the investment bank has remained split between the two families. The plan simplifies the ownership of the banking operations worldwide and will help integrate the teams further.
The new structure will also facilitate the succession plans of David de Rothschild. He will be chairman of PO Gestion, a company fully owned by the Rothschild family and which will control Paris Orleans (PAOR), while Nigel Higgins, chief executive officer of Rothschilds Continuation, and Olivier Pecoux, CEO of Paris Orleans, will become co-heads of PO Gestion. His son Alexandre de Rothschild, 32, joined the family bank in 2009 from Argan Capital, Bank of America Corp.’s former European private- equity division.
“My son at 37 may be qualified to play some role,” David de Rothschild said in a 2005 interview. “It’s subject to him enjoying it and having the qualities.”
He envisages stepping down when he is between 72 and 76, he was quoted as saying in an interview with French newspaper Le Figaro today.
David was born in the U.S. when his parents fled the Nazis during World War II. The family returned to Europe when the war ended, and during the 1960s, Evelyn and his cousin Jacob rebuilt the London bank, N.M. Rothschild & Sons Ltd.
June Approval Sought
In Paris, David’s father, Guy, expanded the bank by opening branch offices and taking deposits. David joined the investment bank as chairman of the management committee in 1978 when he was 36. In 1982, the Paris bank was nationalized by Socialist President Francois Mitterrand. The same year, David opened an asset-management business in France, which he called PO Banque.
Paris Orleans is offering to buy out minority shareholders at 17 euros ($22) per share and will seek approval at a meeting in June, it said. Paris Orleans directly and indirectly owns 45 percent of Rothschild & Cie. and controls about 53 percent of Rothschilds Continuation. RIT Capital Partners Plc, the London- based investment trust led by Jacob Rothschild, and Edmond de Rothschild Group aren’t part of the group led by David de Rothschild.
Paris Orleans shares rose 3.4 percent to 16.86 euros at 12:50 p.m. in Paris, valuing the company at 548.2 million euros.
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