Credit Suisse balks at UBS’s billion-dollar offer
Credit Suisse has reportedly rejected a billion-dollar takeover bid from UBS.
UBS’s offer, made on Sunday, was for 0.25 Swiss francs per share to be paid in shares, according to financial media reports. 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 withdraw from the deal if credit default spreads increase by 100 basis points or more, depending on the FinancialTimes.
Swiss authorities are seeking to broker a deal that would resolve a Credit Suisse rout that sent shockwaves through the global financial system over the past week when panicked investors dumped its stocks and bonds following the collapse of several small US lenders. A backstop from the Swiss central bank briefly halted the declines, but the market drama carries the risk that customers or counterparties will continue to flee, with potential ramifications for the wider 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 intervene, according to people familiar with the matter. Talks accelerated on Saturday, with all parties pushing for a solution that can be executed quickly after a week in which clients withdrew money and counterparties withdrew from some transactions with Credit Suisse.
It’s unclear whether Credit Suisse can survive Monday without a deal to back the bank. According to Financial Times.