The biggest shareholder in RHJ International (RHJI), Franklin Equity Group, is mulling over the decision to support a proposal of breaking up Belgium-based RHJI – the owner of private bank Kleinwort Benson.
A consortium of hedge funds – that has 4% shareholdings in Kleinwort Benson and is led by Equilibria Capital Management from Geneva – called for the break-up of RHJI at the end of May 2013.
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The letter, which was sent to the RHJI board by the consortium, outlined a series of proposals ahead of RHJI’s annual general meeting on 18 June, including the return of the portion of the EUR250 million held in cash by the firm and work towards a full break up.
Edwin Lugo, portfolio manager at Franklin Equity Group told Reuters, "We will review the proposals from Equilibria and their investor group, in addition to having a dialogue with the management of RHJI."
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By GlobalDataThe shareholder group, which also includes Britain’s Polar Capital, French Mantra Investissement, Spain’s Alpha Plus, and Cayman Islands-based Overseas Asset Management, has asked RHJI to stop any corporate activity, such as further acquisitions. One of the plans is to purchase the BHF-Bank unit of Deutshche Bank AG.
On 3 June, however, RHJI wrote to shareholders urging them to sit tight before an end-of-summer deadline to buy Deutsche Bank’s BHF-Bank, saying that it could not pull out of the BHF-Bank bid before the end of the summer without being exposed to possible compensation claims.
"The company has existing contractual commitments in respect of the BHF transaction to both Deutsche Bank, as the seller, and to our co-investors," RHJI said in the letter.
RHJI reached an agreement with Deutsche Bank on the acquisition of BHF-Bank for EUR384 million in September 2012, but is still waiting for the German regulator BaFin to approve the deal.
The group also rejected a set of complaints by the consortium over the planned purchase and RHJI’s corporate structure.
Shareholders will, however, vote on the proposals at RHJI’s annual meeting later this month.
