Kleinwort Benson Group Announces Update on BHF Acquisition

LONDON, Oct. 30, 2013 (GLOBE NEWSWIRE) --

Kleinwort Benson Group Limited ("KBG"), the wholly- owned subsidiary of financial services group RHJ International ("RHJI" or "the Company") is providing an update on the proposed acquisition of BHF-BANK ("BHF"), following a decision by BlackRock, one of the original co-investors, to withdraw from the transaction and the remaining co-investors to increase their involvement. KBG and RHJI will together acquire 100% of BHF for an estimated consideration of €354 million, subject to closing purchase price adjustments. KBG will acquire 91% for €322 million in cash. RHJI will acquire the remaining 9% stake directly by issuing RHJI shares to Deutsche Bank at par value. As a consequence of BlackRock's decision to withdraw from the transaction, the associated capital increase in KBG has been revised, with RHJI's retained interest increasing to 65% from the 60% that was connected with the original transaction, while the balance of 35% will be split among the three remaining co-investors: Fosun Group, AQTON SE (an investment company wholly-owned by German entrepreneur Stefan Quandt), and entities affiliated with Timothy C. Collins. As previously reported, all of the regulators responsible for the individual Kleinwort Benson entities approved the original transaction a number of months ago. We are therefore confident that we will be able to obtain formal regulatory decisions from all of the necessary regulators in the coming weeks. During this period of active engagement with the individual regulatory bodies RHJI, KBG and the individual co-investors remain bound by the previously disclosed contractual commitments to each other and to Deutsche Bank as seller. We continue to believe that the proposed acquisition of BHF-BANK is the best way for the Company to maximise shareholder value and that it is in line with our strategic priority of creating a strong and profitable financial services business. BHF has undergone a major transformation in recent years and has emerged with a significantly reduced and cleaner balance sheet, strong capital ratios and improved profitability. In the six months to June 30, 2013, BHF reported an operating profit of €6.8 million, a core tier 1 ratio of 16.6% and a reduced balance sheet of €7.5 billion compared with €12.7 billion in 2010. BHF represents a strong strategic fit with our existing financial services businesses, with the combination of their complementary business models in wealth management and asset management in the fastest growing markets for these services providing significant profitable growth opportunities. This, together with the potential synergies we expect to capture through the combination of back office functions, underlines our confidence that this transaction will be earnings and value accretive. If the BHF transaction does not proceed we will, in line with our previous commitments, consult with our shareholders on the timing, mechanism and quantum of a capital return. Leonhard Fischer, Chief Executive Officer of Kleinwort Benson Group and RHJ International, commented: "Today's announcement is a decisive development in our proposed acquisition of BHF-BANK. While we are disappointed at not having been able to conclude the transaction as originally envisaged, we accept BlackRock's decision to withdraw from the process and would like to thank them for their unwavering support of RHJI's financial services strategy as a major shareholder. Given the progress that has been made to date and the strong support of our remaining co-investors, we are confident that we will be able to secure the necessary regulatory decisions in the near future, and remain committed to a return of capital to our shareholders should the transaction not proceed." About Kleinwort Benson Group and RHJ International Kleinwort Benson Group Limited. is a 100% owned subsidiary of RHJ International, with over €10 billion of assets under management ("AuM"), and comprises the businesses of Kleinwort Benson Bank Limited and Kleinwort Benson Channel Islands Holdings Limited (collectively "Kleinwort Benson") and Kleinwort Benson Investors Dublin Ltd ("Kleinwort Benson Investors"). Its wealth management operations are conducted through Kleinwort Benson, an independent and relationship-driven private bank with a heritage dating back to the 1780s. As at 30 June 2013, Kleinwort Benson had a tier 1 capital ratio of 19% and €6.3 billion of AuM. Kleinwort Benson Group's asset management operations are carried out by Kleinwort Benson Investors, a Dublin-based institutional asset manager that offers investors innovative and differentiated specialist strategies on both a segregated and unitised basis. As at 30 June 2013, Kleinwort Benson Investors had €4.0 billion of AuM. RHJ International is a financial services group with principal activities in wealth management, asset management and merchant banking. RHJI is a limited liability company incorporated under the laws of Belgium, with its registered office at Avenue Louise 326, 1050 Brussels, Belgium. RHJI is listed on the Euronext Brussels, with the ticker symbol "RHJI". For further information, please contact: Duncan Heath Investor Relations Director RHJ International Tel: +32 2 643 6013 E-mail: dheath@rhji.com Full Press Release (PDF): http://hugin.info/135946/R/1738331/583572.pdf [HUG#1738331] Source:RHJ International SA