EFG denies privatisation plan
Listed Swiss private bank EFG International has refuted suggestions that it might taking its shares private, according to a spokesman.
Chief executive Lonnie Howell was reported as saying this week: "Going private could be imagined. If nobody likes the shares, privatisation makes sense," according to Swiss newspaper Handelzeitung.
The spokesman said the quote had been taken out of context. He said: " That statement was backward-looking, Lonnie was referring to a period when the firm was in the eye of the storm, privatisation was something that could have been an option. But it is not under consideration now, the firm stands by its strategy to grow organically and increase the profitability of the business."
Industry sources say privatisation is highly unlikely. "Privatisation would be a long shot, but if it were to happen, it would involve a private equity deal" said one broker.
But a private equity manager responded "It is pretty unlikely because it is just too complicated, there are so many minority shareholders and many stakeholders would prefer to remain listed," said a private equity manager. An investment banker agreed: "It's too complex."
Howell said when the financial climate becomes clearer and it has rebuilt its clients assets, EFG International will start considering large acquisitions.
Chairman Jean-Pierre Cuoni fired the starting pistol by telling Bloomberg yesterday that EFG would “certainly” like to buy Swiss-based RBS Coutts Bank, although he added that the private banking unit of Royal Bank of Scotland Group Plc is not currently for sale.
However, EFG International's ability to use its shares as acquisition currency has been dented over the last two years, follwoing a 63% fall in EFG International's share price to CHF16.80 yesterday, despite recovering 37% since reporting a first-half profit drop of 89% to Sfr 20 m in July.
According to the Howell interview prospects have been looking up in the third quarter and EFG is on the way to 20-30% organic growth. Earlier this year EFG cut 7% of its wealth managers to pare back costs. EFG International is backed by the wealthy Latsis family.
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