UBS plans to acquire Credit Suisse for up to $1 billion

According to reports, according to the Financial Times, UBS has proposed to acquire Credit Suisse for up to $1 billion. The Swiss authorities are planning to amend the country’s laws to bypass shareholder votes on the deal, as they are eager to finalize the deal by Monday. Four people familiar with the matter said that an all stock transaction between Switzerland’s two largest banks would be signed as early as Sunday night, and the transaction price would be only a small portion of Credit Suisse’s closing price on Friday, which would almost cost Credit Suisse’s shareholders nothing. People familiar with the matter said that on Sunday morning, the two sides had a communication on the acquisition offer. UBS proposed to purchase the shares of Credit Suisse at a price of 0.25 Swiss francs per share, which was far lower than the closing price of 1.86 Swiss francs last Friday. People familiar with the matter added that UBS also insisted on setting significant adverse change clauses, which would invalidate the transaction if its credit default spread jumped by 100 basis points or more. Everyone emphasized that the situation is changing rapidly, and there can be no guarantee that the terms will remain unchanged or that an agreement can be reached. People familiar with the matter said that the current terms are unfair to Credit Suisse and its shareholders. The Swiss Central Bank, UBS, Credit Suisse and Finma all declined to comment.

Interpretation of this information:

According to reports, UBS has proposed to acquire Credit Suisse for up to $1 billion, and the Swiss authorities are planning to amend the country’s laws to bypass shareholder votes on the deal. An all stock transaction between Switzerland’s two largest banks would be signed as early as Sunday night, and the transaction price would only be a small portion of Credit Suisse’s closing price on Friday. UBS proposed to purchase the shares of Credit Suisse at a far lower price than its closing price last Friday and insisted on setting significant adverse change clauses that would invalidate the transaction if its credit default spread jumped by 100 basis points or more. However, everyone emphasized that the situation is changing rapidly, and there can be no guarantee that the terms will remain unchanged or that an agreement can be reached.