Credit Suisse Balks At $1 Billion Offer from UBS

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Credit Suisse Balks At $1 Billion Offer from UBS


JOHN CARNEY
19 Mar 2023

Credit Suisse is reportedly pushing back against a $1 billion acquisition offer from UBS.



The UBS offer, made on Sunday, was for 0.25 Swiss francs per share to be paid in stock, according to reports in the financial media. Shares of Credit Suisse were trading at around 1.86 francs at the close of trading on Friday, giving the bank a market capitalization of around 7.4 billion francs.



UBS also wants the right to back out of the deal if credit default spreads rise by 100 basis points or more, according to the Financial Times.



Bloomberg reports:



Swiss authorities are seeking to broker a deal that would address a rout in Credit Suisse that sent shock waves across the global financial system over the past week when panicked investors dumped its shares and bonds following the collapse of several smaller US lenders. A liquidity backstop by the Swiss central bank briefly arrested the declines, but the market drama carries the risk that clients or counterparties would continue fleeing, with potential ramifications for the broader industry.



The complex discussions over what would be the first combination of two global systemically important banks since the financial crisis have seen Swiss and US authorities weigh in, according to people with knowledge of the matter. Talks accelerated Saturday, with all sides pushing for a solution that can be executed quickly after a week that saw clients pull money and counterparties step back from some dealings with Credit Suisse.



It is unclear if Credit Suisse can survive on Monday without some deal to support the bank. Swiss authorities planning to change the country’s corporate laws to eliminate the requirement a shareholder vote on the transaction, according to the Financial Times.


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