UBS has offered to buy Credit Suisse for up to $1 billion, the Financial Times reported on Sunday, but the Swiss bank has reportedly pushed back on the deal by stating that the offer is too low.
A deal between the two banks has not yet been agreed upon, and the expected amount is only a small fraction of Credit Suisse’s closing share price on Friday.
Suisse Credit, however, has pushed back on the deal, saying that the offer is too low and would hurt shareholders and employees who have deferred stock, according to Bloomberg.
In order to push through the move, Swiss authorities have agreed to change laws so they can bypass a shareholder vote to approve the deal. This should ensure that the deal is completed by this Monday, the Financial Times said on Sunday.
Shareholders will therefore be left with next to nothing, people “in the know” told the British newspaper.
Related News
- 'No risk' to Belgian banks following week of turmoil, governor reassures
- ECB rate hike condemned as 'reckless' by Europe's major trade union
- Credit Suisse shares plunge over US banking fears
UBS is offering 25 cents per share, payable in UBS shares. On Friday, Credit Suisse shares closed at 1.86 francs (CHF). Furthermore, UBS has also demanded that the deal be declared void if its own credit default spread (the collateral against a default) was to rise by 100 basis points or more.
Switzerland is also looking into the only other viable option other than the UBS' takeover: the a full or partial nationalisation of Credit Suisse, insiders report to Bloomberg.
Swiss authorities are urgently seeking to restore confidence in Switzerland's banking sector.
