UBS agrees to buy Credit Suisse for over $2 billion — report
Swiss Banking giant UBS has agreed to buy embattled lender Credit Suisse for over $2 billion according to the Financial Times.
Swiss Banking giant UBS has agreed to buy embattled lender Credit Suisse for over $2 billion according to the Financial Times. This comes amid frantic talks seeking a solution in Bern before the markets open on Monday.Switzerland's largest bank, UBS, has agreed to pay over $2 billion for Credit Suisse in a deal struck on Sunday, according to business publication The Financial Times. The paper cited unnamed sources familiar with the matter.
Government and banking officials had been locked in urgent talks to rescue the embattled lender, which was given a $54 billion (€50 billion) lifeline by the country's central bank this week.
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Switzerland's government had announced that a press conference would take place on Sunday evening at the Bundeshaus in Bern, but did not say when.
Offer barely one quarter of shares' face value
Earlier there were reports that UBS had offered to buy the bank for up to $1 billion, but Credit Suisse had reportedly pushed back against the offer.
Swiss media and Reuters news agency also reported that UBS was also seeking $6 billion in guarantees from the Swiss government as part of a possible purchase of its rival, citing a person with knowledge of the talks. The guarantees would cover the cost of winding down parts of Credit Suisse and potential litigation charges.
The Financial Times said UBS would pay 0.50 Swiss francs (around $0.54 or €0.50) per Credit Suisse share, well below the closing price of 1.86 francs on Friday. That would make the bank's value by market capitalization around $7 billion, while as recently as a year ago Credit Suisse was valued at roughly $25 billion by shareholders.
The publication reported that Swiss authorities were planning to change laws so a shareholder vote for the transaction could be bypassed, with investors highly unlikely to be satisfied with the compensation.
The aim for such a move would be to guarantee the transaction would be completed before markets open on Monday, at which point the stock could in theory renew its freefall.
kb/msh (Reuters, AFP)
(The above story first appeared on LatestLY on Mar 19, 2023 11:20 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).