Julius Baer is reportedly preparing a strategic coup, set to acquire the EFG International company, in a deal valued at CHF 4.5 billion (around 4 billion euros). This potential acquisition has captured the attention of the financial world, not least because of the involvement of the influential Latsis family, who hold a significant stake in EFG.
The Latsis family, known for their roots in the shipping industry and their substantial business interests in Greece, are said to be negotiating the terms of the deal with Julius Baer. So far, neither bank has responded to media inquiries on the matter, but the rumor mill is buzzing.
Recent insider sales by EFG top executives are also being noted, though financial portal Tippinpoint argues that such sales would be impossible if a deal were imminent. Despite this, the rumors persist. According to one source, Baer and EFG plan to announce the deal tomorrow after the market closes.
This speculation should be approached with caution, as sources close to EFG dismiss these claims. The scenario circulating suggests that Julius Baer would acquire EFG entirely, paying the required price partly in cash and partly in its own shares. For each EFG share, Baer would pay around CHF 15, equating to approximately CHF 4.5 billion at EFG’s current stock price.
Julius Baer does not have the necessary funds readily available. Thus, the sellers would receive Baer shares in addition to cash for their EFG shares. Giorgio Pradelli, the current CEO of EFG International, would become the new CEO of the expanded Baer, which would manage over CHF 600 billion in client assets.
Pradelli, who has transformed EFG into a rising star, brought many advisors from Credit Suisse on board. His EFG is seen as the winner in the race for top talent from the fallen Swiss banking giant. According to the NZZ, EFG’s bonus model, which gives advisors a significant percentage of the revenues they generate, is a hot topic in the industry.
This model has been beneficial for EFG’s stock, which has soared more than 50% in the last two years. The main beneficiary of this surge is Boris Collardi, the former Baer CEO who acquired about 3.5% of EFG International in spring 2022. At that time, the stock was around CHF 7, and Collardi paid approximately CHF 80 million for the package. If Baer acquires EFG for CHF 15 per share, Collardi would have turned CHF 70 million into CHF 170 million in 26 months.
Collardi is said to be the true mastermind behind the potential deal, according to Zurich financial circles. He has always made it clear that he is not interested in cash but wants to exchange his EFG shares for Baer shares. If true, and everything goes according to the current plan, Collardi would become a central Baer shareholder, potentially claiming a seat on the board.
This would mark the triumphant return of the banker who made Baer a leading force in pure play private banking from 2009 to 2017. During Collardi’s aggressive expansion, including the acquisition of Merrill Lynch International, risks piled up at Baer: FIFA, PDVSA, 1MDB, Lars Windhorst, Pierin Vincenz, wealthy Russians, and ultra-rich Arabs. Benko came later.
Collardi left in late 2017 to become a new partner at arch-rival Pictet. That ended in 2021. His short stint in Geneva made Collardi even wealthier, and he invested part of his fortune in a football club in Italy, real estate, and fun apps.
If Collardi is the architect of this historic merger, his achievement lies especially in his dealings with the Latsis family, who hold over 40% of EFG. Initially, the Latsis family demanded 100% cash for their stake from Julius Baer. Now, it seems the parties may have reached an agreement, at least according to the rumors.
The new queen of Swiss private banking would be Baer, with her CEO coming from EFG. The smiling third party would be Boris Collardi. The prodigal son would stage a comeback of galactic proportions on Zurich’s Bahnhofstrasse.
