Top private bank plans to open up to public

Analysts are looking at Julius Bär in a different light Keystone

Switzerland’s largest private bank says it plans to become a fully public company, ending over a century of strategic control by its founding family.

Shares in Julius Bär and other private banks rose following the announcement, which sparked speculation of a possible acquisition campaign – or an outside takeover.

The proposed capital structure reform would reduce the influence of the bank’s founding family, bringing their voting rights into line with their stake in the group.

At present, family members hold 18 per cent of the shares but a majority – 52 per cent – of voting rights.

A statement issued by the company on Monday said that with the unification of the capital structure and voting rights, Julius Bär would bring its capital structure in line with the “one share, one vote principle”.

The bank says the change, which will be proposed at the annual shareholders’ meeting in April, will give it strategic options that do not currently exist.

However, analysts say it would also lower barriers to a potential takeover of the bank, which has been controlled by the Bär family for 115 years.

Takeover talk

Julius Bär is Switzerland’s largest private bank and one of the largest Swiss companies overall, with a market value of about SFr4.5 billion ($3.81 billion).

Dealers said the price hike reflected growing hopes that there would now be greater consolidation in the sector, which warned recently that it was facing a tough year.

Niklaus Baumann told last week’s meeting of the Swiss Private Bankers Association, that over-regulation of the banking sector might lead to forced consolidation among smaller banks.

“This new structure will certainly fuel speculation of a takeover,” commented Bank Sarasin equity analyst Javier Lodeiro.

“Up to now, nobody wanted to sell, but now the Bär family could be ready.”

Development options

However, chairman Raymond Bär played down such takeover speculation, saying the intention was to give the company more options to “develop independently”.

Helva analyst Peter Thorne agreed that Julius Bär was more interested in buying than selling, and said an obvious target would be the small private banks of Switzerland’s largest player, UBS.

He pointed out that they were not part of UBS’s core operations, and added: “Such a deal may be the source of rumours linking Julius Bär with UBS in recent days.”

Other analysts say the latest development follows serious disagreements within the group about future strategic direction.

They cite the departure from the group of Michael Bär – leader of the new generation of the Bär family and currently in charge of private banking.

swissinfo with agencies

Key facts

The Julius Bär share price rose by 7.12 per cent on Monday to SFr409.75 from Friday’s close of SFr382.50.
It has risen by 19.81 per cent over the past month.

In brief

The proposed reforms at Julius Bär would cut the voting rights of the Bär family from 52 per cent to 18 per cent.

The move foresees a capital structure in line with the “one share, one vote” principle.

Shareholders will vote on the issue at their annual meeting on April 12.