October 21, 2020

Oddo & Cie joins battle for BHF Kleinwort Benson

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1bb075f6-b76c-4cbd-91a5-3c65c6df9ac4By Michael Stothard From Financial Times

French private bank Oddo & Cie has thrown itself into the battle to buy Anglo-German banking group BHF Kleinwort Benson, launching a counter bid to acquisitive Chinese investor Fosun.

Oddo said on Friday that it was offering to buy the 78 per cent of the company it does not already own for €5.75 per share, valuing the bank at €760m, adding that it had secured majority backing from shareholders.

“Buying BHF will make us a key player in the eurozone and the area’s largest private bank by assets,” Philippe Oddo, chief executive, told the Financial Times. He added that the deal would nearly double the bank’s number of staff to about 2,400.

The counter-offer places Oddo in direct competition with Fosun, which owns a nearly 20 per cent stake in BHF Kleinwort Benson, and which in July announced its intention to offer €5.10 per share to buy the rest.

Fosun has made a habit of engaging in tricky battles to buy European companies, this year winning control of Club Med after a two-year tussle with rival Italian tycoon Andrea Bonomi.

The Hong Kong-listed group, run by Guo Guangchang, the so-called “Chinese Warren Buffett”, is one of the few Chinese companies aggressively targeting acquisitions overseas.

The group spent $6.5bn on stakes in 18 overseas companies in just 23 weeks between February and July, according to Dealogic.

But Mr Oddo said he was not worried about going up against Fosun, because he had secured support for his bid from two shareholders, Franklin Templeton Group and Aqton. This means he will control just over 50 per cent of the shares.

“I do not see Fosun coming back with a higher bid because we will have the majority of the capital. I knew there was a risk of them upping their offer, so I made sure this deal was in place first,” said Mr Oddo.

He added that he was “not worried” about Fosun if it decided to keep its nearly 20 per cent stake in the company.

Oddo said that if the bid succeeded it would sell the Kleinwort Benson business in the UK and the Channel Islands to Société Générale, which is also providing financing for the takeover with JPMorgan.

Kleinwort Benson is one of the oldest names in British banking, tracing its roots back to 1786 with the foundation of Rathbone & Benson in Liverpool and a financial trading company in Holstein founded by Hinrich Kleinwort.

But its reputation has faded during the past 20 years, as it has pared its focus to wealth management.

The equity of Kleinwort Benson, which has about £5bn in assets under management, is valued at about £190m, said Mr Oddo. He declined to say the price that SocGen would pay for it.

Oddo & Cie, which acquired Germany’s Close Brothers Seydler last year, will also seek permission for a capital increase of €50m to €100m at an extraordinary meeting of shareholders scheduled next week, said Mr Oddo.

Any offer would need regulatory approval, with the decision set to be made in mid-December. Fosun is waiting for regulatory approval for its offer.

IMAGE: Philippe Oddo

For more on this story go to: http://www.ft.com/intl/cms/s/0/b10cc1c8-9504-11e5-8389-7c9ccf83dceb.html#axzz3sjOhg0l1

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