Rothchild rebuked by takeover panel
The blue-blooded bankers, who claim to offer ‘highest quality financial advice and execution expertise’, were hit with a rare public rebuke by the Takeover Panel after fouling up during a takeover by telecoms giant .
The public admonition was the first by the Takeover Panel since 2005, and it came after two similar slips by the bank in recent years.
According to the panel, Rothschild’s failures came during the 63m takeover by BT of broadband provider .
Share purchases made during the transaction pushed BT’s holding in the firm above 30%, inadvertently triggering a mandatory offer for the whole of PlusNet’s shares.
That was bad news for BT, because it meant ploughing ahead with a takeover even if all of the competition conditions attached to the deal weren’t met.
Because the error was unintended, BT’s brokers were allowed by the Panel to reduce their holding back below 30% and the offer proceeded normally.
The share purchases were executed by JPM Cazenove, which did not receive a reprimand.
Rothschild had made similar errors in recent years, meaning the panel’s executive committee decided the episode should be made public.
The Takeover Panel said: ‘The Executive notes that on two previous occasions in recent years offerors for whom Rothschild was acting as financial adviser breached an important provision of the Code in the context of share purchasing operations.’
The panel revealed that Rothschild had ‘accepted this criticism’. The Takeover Panel declined to say what Rothschild’s previous breaches were.
Violating the Code does not have legal repercussions, but falling foul of such a basic rule will do nothing to enhance the bank’s reputation.
The Rothschilds date their involvement in finance back to the 18th century. Less ignominious episodes included helping to fund Wellington’s armies and raising finance for the Suez Canal.
Other stories:
Linden in 200m takeover talks
Mellon makes 90m from Jimmy Choo
Big guns’ final shootout in Corus battle
Sly plays safe in Trinity sell-off
Bid war for Wilson Bowden begins