UBS has offered to buy Credit Suisse for up to $1 billion, revealed Financial Times.
The agreement between the two largest Swiss banks it would be signed on Sunday night. The offer means a fraction of Credit Suisse’s closing price last Friday, four people with direct knowledge of the situation told the British outlet.
The offer was communicated on Sunday morning with a price of 0.25 Swiss francs per share to be paid in UBS shareswell below Credit Suisse’s closing price of 1.86 Swiss francs on Friday, the outlet added.
To speed up the acquisition, the government is preparing emergency measures and plans to introduce legislation that will bypass the normal six-week consultation period required for UBS shareholders, so that the deal can be closed immediately.
Under pressure from the authorities, UBS, the main Swiss bank, must finish this Sunday the purchase of his rival, Credit Suisse, to avoid a debacle and a contagious wave of panic in the stock markets on Monday.
Credit Suisse is one of the 30 largest banks in the world, and its spectacular stock market crash this week sent jitters through the financial world. who fears a contagion effect after the collapse of entities in USA.
Several members of the Swiss government met on Sunday morning at the finance ministry in the capital Bern, the newspaper reported. 20 Minutes. The president of the confederation, Alain Berset, and other members of the Federal Council arrived from 0630 GMT, after a series of crisis meetings held on Saturday.
Such a merger is a complex affair that would typically take months to complete.but under pressure from the authorities, UBS will have to close the deal in a few days.
The Swiss authorities consider that there is no choice but to push UBS to overcome the reluctance, boosted by pressure from Switzerland’s main economic and financial partners, who fear for the stability of their own financial markets, according to Blick.
“When the stock market opens on Monday, Credit Suisse could be a thing of the past,” the tabloid said.
Swiss banking rules state that UBS should consult its shareholders for a period of six weeks, but emergency measures could be applied for this operation, according to the Financial Times business daily, citing sources who asked to remain anonymous.
“The merger of the century”
The Swiss market opens Monday at 0800 GMT and a solution is expected to be found by then as Credit Suisse is perceived as a weak link in the system.
The bank posted a record drop on Wednesday and its stock market value plummeted to 7 billion Swiss francs, an almost equivalent amount in euros, which is an almost insignificant sum for an entity considered to be of systemic importance, so its bankruptcy must be avoided.
According to Financial Times and click, bank customers withdrew 10 billion Swiss francs in deposits in one day at the end of last week, a tangible indication of distrust towards the institution.
The newspaper SonntagsZeitung He called the possible operation “the merger of the century.” “The unthinkable becomes reality: Credit Suisse is about to be acquired by UBS,” the weekly said.
According to the agency Bloomberg, UBS requires public authorities to pay legal costs and potential losses that can amount to billions of Swiss francs.
The negotiation is stagnant around the activities of investment banking, according to the financial agency, and one of the hypotheses to get out of the crisis is that the purchase is partial and leaves this division out.
These negotiations occur after a black week on the stock market in which the Swiss central bank had to intervene and lent Credit Suisse 53.7 billion dollars to give it a breath of fresh air and trying to appease the nervousness of investors, without success.
At the end of October, Credit Suisse presented a huge restructuring plan that included cutting 9,000 jobs by 2025, representing 17% of its workforce.
The entity, with a workforce of 52,000 people at the end of October, wanted to focus on more stable activities and radically transform its business banking.
With information from AFP
The world’s largest investment fund had warned Silicon Valley Bank a year ago that its risk controls were deficient
Banking crisis: frantic negotiations to avoid the collapse of Credit Suisse by merging it with UBS
Ten keys to understanding why US banks fall despite the Biden government’s bailout