Updated with some context: Bumi, the London-listed Indonesia-focused coal miner set up in 2010 by Nat Rothschild when he convinced Indonesia’s influential Bakrie family to reverse their coal assets into his cash shell Vallar, has been, well, rollicked as the share price plunged because of sliding coal prices, concerns about Bumi’s corporate governance, high debt levels and the out-break of investor warfare. Shocking. And Bumi is under particular stress right now because of allegations of financial irregularities at two of its subsidiaries.
The release below concerns the long awaited report into that mire by law-firm Macfarlanes. Well, we don’t actually get the report itself, but we do get some details… Read more
PAI Partners has launched an €800m-€1bn auction for Compagnie Européenne de Prévoyance, France’s biggest mortgage insurance services company, reports the FT. Several buy-out groups, including Apax Partners, Montagu, Cinven and Charterhouse, are working on potential bids for CEP, which PAI, France’s biggest private equity group, bought from the Bessé family in 2005. Rothschild is handling the sale and first-round bids are expected in February. The sale would generate a more-than fivefold return on PAI’s initial investment. PAI is also expected to receive bids of about £650m next month for Kwik-Fit, the UK car parts retailer, from US buy-out firm CDR and Japanese tyremaker Bridgestone. The French group is also selling its stake in Yoplait, the world’s second-biggest yoghurt brand.
JPMorgan’s hyperactive M&A banker Ian Hannam has been uncharacteristically quiet over the past few months.
And now we know why. He’s been working on a deal to create a “new London-listed resources champion”. Read more
Vodafone is preparing to sell its 3.2 per cent shareholding in China Mobile as the UK mobile phone group demonstrates determination to dispose of its minority stakes, reports the FT. Vodafone has appointed Rothschild to supervise the sale of the China Mobile stake, which is worth almost $6.8bn based on the Chinese mobile operator’s share price. At least some of the proceeds generated by the sale are likely to be returned to shareholders, some of whom have been pressing Vodafone to dispose of its minority stakes.
ISS, the Danish cleaning, security and catering group, is considering launching one of the year’s largest IPOs in Europe, valuing it at €5bn-€6bn ($6bn-$7.6bn), reports the FT. While reporting solid first-half results, the company, one of the world’s biggest private sector employers with more than half a million staff, said it had hired Rothschild, Goldman Sachs and Morgan Stanley to conduct a review that could lead to a sale by its owners – Goldman and EQT, the buy-out arm of Sweden’s Wallenberg family. Bloomberg cites analysts saying it is possible that only a portion of the company may be floated.
UK-based noodle restaurant chain Wagamama is being put up for sale by its private equity owner for up to £230m, the Times reported on Monday. Lion Capital, the UK private equity firm whose portfolio companies include Weetabix breakfast cereal, will hire Rothschild to find a buyer, the report said. Lion has a 70% controlling stake in Wagamama and last tried to sell the business in 2007 after pulling £250m flotation.
Italian bank UniCredit is seeking to sell AS Roma, one of Italy’s top Serie A football clubs, following an agreement on Thursday with Rosella Sensi to settle debts owed to the bank by Italpetroli, her troubled family holding company, reports the FT. UniCredit is expected to appoint Rothschild as adviser in the sale process. Most of Italpetroli’s other assets, mainly in oil storage and handling, will also pass to UniCredit, which previously owned 49% of Italpetroli.
Rothschild, the investment bank, is bolstering its senior management in the US, reflecting growing global corporate demand for independent advice, reports the FT. Jim Lawrence, co-founder of LEK Partnership, a consulting firm, and most recently CFO of Unilever, will become chief executive of Rothschild North America. He will also become co-head of global investment banking, the first time that role has been based in the US, alongside Nigel Higgins in London and Olivier Pecoux in Paris.
The Rothschild banking dynasty is to appoint a non-family member as chief executive for the first time in its 212-year history, as the group seeks to adapt its management structure to the post-crisis climate. Nigel Higgins, a 27-year veteran of the company and co-head of the investment banking business for the past decade, will become chief executive of the family holding company in March, taking over from David de Rothschild, who will remain as executive chairman.
One of the biggest banker poaching exercises seen in Europe for years is under way as those banks that have survived the credit crisis better than their rivals hire senior talent., the FT reported. Since the September collapse of Lehman Brothers, banks such as Deutsche Bank, Credit Suisse and Rothschild have hired managing directors in Europe across debt and equity capital markets and mergers and acquisitions. These banks are making strategic strikes, luring star bankers who would have been expensive during boom times, or picking up whole teams that will bring business with them.
Bank of China may have to delay a planned $342m investment in La Compagnie Financiere Edmond De Rothschild as China’s banking regulator withholds approval, reports Bloomberg. With a Dec 31 deadline approaching, the watchdog has yet to endorse the bank’s application, said people close to the deal, noting that China’s third-largest bank may extend the deadline and seek to complete the purchase in next year’s first quarter. The impasse highlights a tougher stance by the Chinese government after investments in foreign financial firms including Morgan Stanley and Barclays led to about $13bn in paper losses over the past year. China’s six largest banks hold $670bn of cash between them, more than the combined market value of the world’s seven biggest non-Chinese lenders.
BNP Paribas said Thursday it was considering an approach for Société Générale, its French banking rival – a move that would create a European banking powerhouse – but played down the likelihood of an imminent bid. Investors responded coolly to the news, driving down BNP shares 1.5%, valuing its equity at €59.6bn ($88.5bn). SocGen shares rose 1.7% to €83.20, valuing its equity at €38.8bn. Meanwhile, SocGen is planning to substantially reinforce its risk control systems, in a way that would shift power from the trading floor to the back office, and could rein in growth of its star profit generator, according to one director. SocGen is understood to have hired Merrill Lynch and Rothschild to advise on defence strategies, in addition to JPMorgan and Morgan Stanley, which are handling a €5.5bn emergency rights issue. Any offer for SocGen will have to wait until mid-next week, as the Bank of France requires eight working days’ notice before any bid is made for a French bank.
ABN Amro and Rothschild will end their 11-year equity capital markets partnership at the end of the month following Royal Bank of Scotland’s deal to buy ABN’s investment banking assets. The joint venture, ABN Amro Rothschild, “has been very successful,” said Wilco Jiskoot, ABN board member. But the integration of ABN’s investment banking activities with RBS was a logical moment to “re-evaluate” the co-operation. New business origination will end Dec 31, though the banks will jointly complete all existing mandates. People close to the negotiations said they did not expect any redundancies. It is understood there are about 150 bankers in the joint venture – two-thirds from ABN and the rest from Rothschild. They are likely to return to their firms.
It may only be September 21 – but the Q3 data is upon us.
But – yawn – guess who’s at the top of M&A rankings, globally, for the US and for Europe in the year to date? We’re not even going to tell you. It’s too dull. Read more
Starwood Capital and Blackstone are among those mulling a takeover and ultimate break up of leisure group Whitbread, according to a story posted on mergermarket’s daily section of FT.com. Starwood has asked investment bank Rothschild to work on the putative deal, the report said.
An unnamed source at Rothschild is quoted as saying that while a fair amount of work has been done on Whitbread, the recent spike in its share price — up almost 20 per cent in the space of 10 days — has damaged the chances of an offer materialising. The source also claimed another unnamed financial buyer was running the numbers on the company.
Mergermarket said Whitbread’s Premier Travel Inns business would be of primary interest to Starwood, which is primarily a specialist property investor. But the report added that if a move were to be made, it would be for the entire company, which would then be broken-up. Read more
Meggitt has agreed a $1.1bn bid for K&F Industries of the US, showing that UK companies will not play a passive role in merger activity in the global aerospace parts sector. As well as the $1.1bn cash purchase price, Meggitt will assume $700m of K&F debt. The transaction will be financed in part by a one-for-two rights issue at 200p per share, which will raise about £424m. The rest will be paid in debt. Rothschild is advising on the deal while Rothschild and Merrill Lynch are managing the rights issue.
Rothschild, one of the City’s most venerable investment banks, suffered a rare public rebuke on Monday when the Takeover Panel criticised its mishandling of a deal on behalf of BT Group. The panel issued a “statement of criticism” after BT, which was being advised by Rothschild, bought more than 30 per cent of the shares in PlusNet, a specialist broadband provider, in November last year. The purchases breached Rule 9 of the Takeover Code, which states that anyone who buys more than 30 per cent of the shares in a company must make an offer to all shareholders. The panel decided to criticise Rothschild publicly because the bank had breached the code when advising clients on share purchases on two previous occasions in recent years. The Times reports that BT is now reviewing the fees paid to its Rothschild for its work on the deal following the panel’s criticism.
The UK’s Takeover Panel has taken the extremely rare step of giving a bank advising on a takeover a public dressing down. The unhappy recipient of the panel’s wrath is NM Rothschild – which has been advising BT on its negotiations to make an offer for PlusNet, a UK broadband supplier.
The bank was censured by the panel for “failing to prevent breaches of rule 9.1 and 7.1 of the Takeover Panel code in connection with the purchase of shares in PlusNet on behalf of BT on 21 November 2006,” the statement said. Read more
A banquet of Indian food awaited Tata’s deal team, from Deutsche Bank, ABN Amro and Rothschild, when they arrived at Herbert Smith’s offices on Tuesday night, reports the Times. They had a secure line to Mumbai — and a strategy to raise Tata’s offer in 5p increments. CSN had another plan and twice tried to blow Tata out of the water by raising its offer more than once in the same round. Over at the offices of Slaughter & May on Fleet Street, it was “theme” night. As Philippe Varin, the Corus chief executive, David Lloyd, the FD, and Jim Leng, chairman, looked on, they supped Caipirinhas and Indian Kingfisher beers as overhead, a flatscreen TV showed Brazilian football. Mr Varin passed the time playing pool, while Mr Lloyd hit the table football. Mr Leng did a sweepstake. No one, not even bankers Credit Suisse, bet it would go above 600p.