Edmond de Rothschild to take its Swiss bank private

The Edmond de Rothschild Group has entered the final phase of restructuring under chief executive Ariane de Rothschild with a plan to take its Swiss bank private, ahead of a planned expansion through acquisition.

On Wednesday Edmond de Rothschild, which already owns 98 per cent of the private bank, said it would offer to buy all “bearer shares” of the Swiss business for a price of SFr17,945 a share — a 7 per cent premium on its Tuesday close of SFr16,400 — and delist it from the Zurich stock exchange.

The group also plans to consolidate all of the Edmond de Rothschild operations under the Swiss bank, with all shares in its French operations to be transferred across at a market value of SFr542.3m ($539m).

Overall the group, which was founded in 1953 and focuses on private banking and asset management, has about SFr170bn in assets under management and revenues of SFr1.1bn.

The chairman of Edmond de Rothschild is Benjamin de Rothschild, son of the bank’s founder, but it is his wife Ariane de Rothschild who is the real force behind the day-to-day running of the group. She is a Rothschild by marriage rather than blood and the only female boss of a Rothschild company.

The move to take the Swiss bank private is largely symbolic but reflects the next chapter of the group’s evolution.

Since Ms de Rothschild was named chief executive in 2015 she has focused on simplifying the group, tidying up its structure and settling a commercial dispute over the family name with a rival branch of the 250-year-old Rothschild banking dynasty in June last year.

“The heavy transformation is now behind us,” Ms de Rothschild told the Financial Times. “Before I became chief executive, the concept of a single group didn’t exist and there were many different geographical entities at different stages of development.”

Now she says that Edmond de Rothschild is looking to the next chapter. Ms de Rothschild will become chair of the group’s executive committee, and Vincent Taupin who is in charge of its private banking activities is promoted to chief executive.

The group plans to try to expand through acquisitions after its delisting. Ms de Rothschild said: “Given the amount of excessive capital we have, we can afford to make larger acquisitions, both in our existing areas like private banking and asset management, or services and teams that are complementary.”

As well as the Swiss bank, the Edmond de Rothschild family also has a collection of non-financial investments, including the Four Seasons Hotel Megève, the Gitana fleet of racing boats, and a stake in the Château Lafite Rothschild vineyards, as well as various philanthropic activities.

One of Ms de Rothschild’s first acts as chief executive was to launch litigation against her husband’s cousin, David de Rothschild at French investment bank Rothschild & Co, related to the use of the Rothschild name.

Edmond de Rothschild issued a cease-and-desist order to Rothschild & Co, arguing its owners unfairly referred to themselves as “parent of the Rothschild group” — implying it had sole claim to the name. A three-year legal battle ensued before the two groups finally settled in June.

The agreement between the two parties barred both groups from using the Rothschild name by itself and said that they would use only their full names to build future business. Crucially, as part of the deal, the groups unwound their cross-shareholdings in each other, paving the way for the delisting of Edmond de Rothschild that was unveiled on Wednesday.

Last year, Edmond de Rothschild’s assets under management dropped 7 per cent to about SFr128bn. Expenses climbed, and operating profit fell 6.5 per cent to SFr222m.