RHJ International defended its planned purchase of Deutsche Bank AG’s BHF-Bank after a group of investors called for the Belgian investment firm focusing on banking and financial services to be broken up.
“Investments made now enable us to position the company effectively for a future upturn,” Brussels-based RHJ said in a statement on its website today. “Calls for a break-up of the business, therefore, seem unconstructive and damaging. Germany’s BHF-Bank would deliver a strong strategic and cultural fit.”
RHJ’s Kleinwort Benson Group unit is waiting for approval from German regulators after agreeing to buy wealth manager BHF-Bank from Deutsche Bank in September to complement its services in the U.K., the Channel Islands and Ireland. The “ill-considered and drawn out” deal presents risks to RHJ, five of the Belgian company’s shareholders said in a joint statement made public last week, outlining resolutions they want put to the annual general meeting on June 18.
RHJ said it has “contractual commitments in respect of the BHF transaction to both Deutsche Bank, as the seller, and to our co-investors, the violation of which might expose RHJI to claims for damages by Deutsche Bank and our co-investors.”
The investors -- Equilibria Capital Management Ltd., Polar Capital Holdings Plc, Mantra Investissement, Alpha Plus and Overseas Asset Management Ltd. -- blamed losses and share declines at RHJ on “erratic strategy, poor execution and a burdensome corporate structure.” They hold 4 percent of RHJ, according to their statement.
Shareholders should reject the group’s proposals, RHJ’s board said in its statement today. The outcome of the purchase of BHF-Bank “will be determined at the latest by the end of this summer,” RHJ said.
Frankfurt-based Deutsche Bank, which is continental Europe’s biggest bank by assets, agreed to sell BHF-Bank to RHJ for 384 million euros ($500 million) after the Belgian company found co-investors for the deal.