UBS Group AG, a cryptocurrency-friendly bank, is apparently trying to buy Credit Suisse, a major investment bank, for up to $1 billion.
The UBS offer follows BlackRock’s March 19 rejection of claims to a plan to save Credit Suisse. The price offered by UBS is SFr0.25, which is much less than the SFr1.86 closing price on March 17th.
As they race to complete the acquisition before Monday, Swiss authorities are also attempting to amend their nation’s laws to get around the UBS shareholder vote on the transaction.
As soon as March 19, the two major banks might sign the agreement. Yet, as four informed parties noted, it will annihilate the target’s stockholders.
Furthermore, USB argued that the contract would be void if the credit default spreads increased by 100 basis points or higher. Furthermore, the situation is fluid, so similar terms or a finalized agreement are not assured.
Some people disagreed with the announcement, claiming it was an unfair arrangement for Credit Suisse and the stockholders. Others criticized the intentions to avoid a UBS shareholder vote in order to bypass conventional corporate governance regulations.
There hasn’t been any communication between the two lenders up to this point. Hence, the Swiss National Bank and regulator Finma have significantly modified the terms.
The agreement has received approval from the US Federal Reserve (Fed).According to two sources, UBS would drastically cut the size of the investment bank such that the combined organization would account for more than one-third of the combined firm.
Yet, the discussion of Credit Suisse’s business divisions is still unclear and only refers to a 100% takeover of the company. Even while the sale is worth $1 billion, that sum does not include the additional arrangements made by the Swiss National Bank to ensure that it goes through in order to save Credit Suisse.
