Franklin Equity Group, the biggest shareholder in RHJ International, has said that it will not support a proposal to break up the owner of the private bank, Kleinwort Benson.
Ed Lugo, senior vice president and portfolio manager at Franklin Equity Group, in a statement said his firm is frustrated with the company’s performance in the past few years, but will continue to support management in its strategy.
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The statement is a major setback for a consortium of hedge funds led by Geneva-based Equilibria Capital Management that demanded break-up of RHJI, citing poor share performance and "erratic" strategy.
"We clearly recognise the issues brought up by Equilibria and their partners. However, we currently support management, given that the BHF transaction will likely come to a close in the near future and given management’s recognition of the need for a potential capital reduction if the BHF deal is not completed successfully," Lugo said.
"We also believe that management recognizes shareholder concerns, and will take the appropriate actions to realize value. Going forward, we will be closely monitoring their future strategy and encouraging an open and constructive dialogue between the management and all shareholders," he added.
Franklin Equity Group holds close to 20% of RHJI shares.
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By GlobalDataThe shareholder group, which also includes Britain’s Polar Capital, French Mantra Investissement and Spain’s Alpha Plus, is asking RHJI to abandon its initiative to buy Deutsche Bank’s BHF-Bank unit.
