Rothschild & Co’s H1 sales fall 10% amid weak M&A activity

PARIS (Reuters) – Rothschild & Co, the Paris-listed investment bank being taken private by its owners, reported on Thursday a 10% fall in first-half sales, driven by a plunge in dealmaking activity.

Sales over the first six months of the year totalled 1.24 billion euros ($1.36 billion), down from 1.38 billion a year earlier, the company, controlled by the eponymous financial dynasty, said in a statement.

Rothschild’s top division, global advisory, was responsible for the bulk of the decrease, as fees derived from advising on mergers and acquisitions (M&A) plummeted by 30% in the first half.

Rothschild said its first-half net income, group share, nearly halved from a year earlier to 128 million euros.

Global M&A activity fell 40% year-on-year over the first six months of the year, according to Dealogic, although investment bankers and lawyers have expressed optimism that the stock market’s recovery will gradually restore confidence in dealmaking.

In a call with reporters, Managing Partner Francois Perol confirmed the investment bank expected net income to more than halve this year due to the sharp fall in dealmaking.

He said the consortium that seeks to take the company private already owned more than 80% of the shares following the buyout offer valuing Rothschild at 3.7 billion euros.

Concordia, the bank’s controlling shareholder and holding company of the Rothschild family, was joined by three of France’s wealthiest families in the take-private transaction.

The consortium has until Sept. 8 to reach the 90% ownership threshold beyond which it can ask for a squeeze-out of remaining minority shareholders.

($1 = 0.9131 euros)