UBS Proposes to Acquire Credit Suisse for $1 Billion

03/19/2023 11:47 • Metaverse & Beyond • 78 views

According to reports, according to the Financial Times, UBS has proposed to acquire Credit Suisse for up to $1 billion. The Swiss authorities are planning to amend the country’s laws to bypass shareholder votes on the deal, as they are eager to finalize the deal by Monday. Four people familiar with the matter said that an all stock transaction between Switzerland’s two largest banks would be signed as early as Sunday night, and the transaction price would be only a small portion of Credit Suisse’s closing price on Friday, which would almost cost Credit Suisse’s shareholders nothing. People familiar with the matter said that on Sunday morning, the two sides had a communication on the acquisition offer. UBS proposed to purchase the shares of Credit Suisse at a price of 0.25 Swiss francs per share, which was far lower than the closing price of 1.86 Swiss francs last Friday. People familiar with the matter added that UBS also insisted on setting significant adverse change clauses, which would invalidate the transaction if its credit default spread jumped by 100 basis points or more. Everyone emphasized that the situation is changing rapidly, and there can be no guarantee that the terms will remain unchanged or that an agreement can be reached. People familiar with the matter said that the current terms are unfair to Credit Suisse and its shareholders. The Swiss Central Bank, UBS, Credit Suisse and Finma all declined to comment.

UBS plans to acquire Credit Suisse for up to $1 billion

Analysis based on this information:

According to reports by the Financial Times, UBS has currently proposed to acquire Credit Suisse for up to $1 billion in an all stock transaction. The Swiss authorities are planning to amend the country’s laws to bypass shareholder votes on the deal, which they are eager to finalize by Monday. The proposed transaction price would only be a small fraction of Credit Suisse’s closing price on Friday, almost costing Credit Suisse’s shareholders nothing.

While the acquisition offer was communicated between the two sides on Sunday morning, people familiar with the matter added that UBS proposed to purchase the Credit Suisse shares at a price of 0.25 Swiss francs per share, which is far lower than the closing price of 1.86 Swiss francs last Friday. Moreover, UBS insisted on setting significant adverse change clauses, which would invalidate the transaction if its credit default spread jumped by 100 basis points or more.

However, people familiar with the matter emphasized that the situation is changing rapidly and there is no guarantee that the terms will remain unchanged or that an agreement can be reached. The current terms are also deemed unfair by Credit Suisse and its shareholders.

The Swiss Central Bank, UBS, Credit Suisse, and Finma all declined to comment on the matter. The urgency of finalizing the deal by Monday has led to the Swiss authorities’ plan to amend the country’s laws to bypass shareholder votes on the deal.

In conclusion, UBS’s proposed acquisition of Credit Suisse for $1 billion in an all stock transaction with adverse change clauses is currently in the works and is set to be signed as early as Sunday night. However, the proposed transaction price is a small portion of Credit Suisse’s closing price on Friday and is deemed unfair by Credit Suisse and its shareholders. The rapid change in the situation and the urgent need to finalize the deal by Monday add to the uncertainty of the matter.

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UBS Proposes to Acquire Credit Suisse for $1 Billion

UBS plans to acquire Credit Suisse for up to $1 billion

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