UBS bids $1 billion for takeover, Credit Suisse says offer too low. All we know so far
2 min read . Updated: 19 Mar 2023, 10:29 PM IST
PremiumCredit Suisse has signaled a ‘material weakness’ in its internal control for the financial reporting in 2022 and 2021.
UBS Group AG has offered to buy Credit Suisse for up to $1 billion, reported Reuters citing Financial Times. The Swiss government is planning to change the country's laws to bypass a shareholder vote on the deal, reported Financial Times.
These are the latest developments:
a) The all-share takeover deal was set to be signed as early as Sunday, reported The Financial Times.
b) The deal will be priced at a fraction of Credit Suisse's closing price on Friday, and such pricing means that it will all but wipe out the target’s shareholders the report said.
Under the proposed deal, a price of 0.25 Swiss francs a share will be paid in UBS stock, which is far lower than Credit Suisse’s Friday closing price of SFr1.86.
c)Swiss authorities are considering a full or partial nationalisation of Credit Suisse as the only other viable option outside a takeover by UBS Group , Bloomberg reported on Sunday.
Switzerland is considering either taking over the bank in full or holding a significant equity stake if UBS is unable to complete a takeover of Credit Suisse, the report added.
d) Reuters reported that UBS was seeking $6 billion from the Swiss government as part of a possible purchase of its rival.
e) However, Bloomberg News, citing people with knowledge of the matter, said Credit Suisse was pushing back against the offer.
f) Swiss authorities are examining imposing losses on Credit Suisse bondholders as part of a rescue, two sources told Reuters on Sunday, while European regulators are apprehensive for fear it could hit investor confidence elsewhere.
g) Credit Suisse's plan to spin off its investment bank under the First Boston brand is being thrown into doubt by the takeover talks, Bloomberg News reported on Sunday.
h)The Bank of England has indicated to international counterparts and to UBS that it would back a proposed takeover of Credit Suisse.
The Swiss lender has signalled a "material weakness" in its internal control for the financial reporting in 2022 and 2021.
The Swiss bank's shares drop by as much as 30% after its largest shareholder Saudi National Bank said it could not provide more support because of regulatory constraints.
Credit Suisse secures a $54 billion lifeline from the Swiss central bank to shore up liquidity, the first major global bank to get emergency funding since the 2008 financial crisis.
The Swiss authorities provide assurances that Credit Suisse has met "the capital and liquidity requirements imposed on systemically important banks."
