The family plans to buy all publicly held Edmond de Rothschild (Suisse) bearer shares at 17,945 francs apiece – a 9% premium to Tuesday’s closing price – and delist the company from the Zurich stock market in a deal worth about US$98 million.
The French operations will be consolidated into the Swiss bank, with Vincent Taupin promoted to chief executive officer. The stock jumped 8.5% in Zurich trading, its steepest intraday gain in two years.
“My role has been to simplify the group’s structure, which was very complicated and lacked transparency, and to ensure the group’s longevity and stability,” Ariane de Rothschild, president of the group’s executive committee, said in an interview at the bank’s headquarters in Geneva.
“I am passing the torch on to Vincent and to the teams with full confidence. The group has been cleaned up and is in working order now.”
The Edmond de Rothschild group has more than 170 billion Swiss francs of assets under management and more than 1.1 billion Swiss francs of revenue, according to the statement.
Its range of non-financial activities – from wine estates in France, Spain, South Africa, New Zealand and Argentina, to luxury hotels and agriculture, including a farm close to Paris that makes cheese – are grouped under Edmond de Rothschild Heritage.
The changes in the legal structure won’t lead to job cuts, said Ariane de Rothschild, who took the helm of the group in 2015. The changes also come amid widespread speculation that further consolidation is needed in the Swiss private banking industry, with analysts and bank executives suggesting the industry is too fragmented with profit margins under pressure.
Edmond de Rothschild (Suisse) had net income of 222 million francs last year, helped by non-recurring gains, while its operating result was 120 million.
Banks and asset managers across Europe reported a tough end to 2018 as markets tumbled in the last two months of the year, causing clients to pull money out of stocks and hoard cash.
Larger Swiss rival Julius Baer cut financial targets and pledged cost reductions that include eliminating about 140 jobs after assets under management shrank last year. Vontobel Holding said net new money from clients was flat in the second half.
By taking it private, “we are demonstrating our commitment to our banking group and our ambitions for growth, both organic and through acquisitions,” Benjamin de Rothschild, chairman of Edmond de Rothschild Holding’s board of directors, said in the statement.