Ajit Karn
Credit Suisse Group AG is resisting UBS Group AG’s offer to acquire it for up to $1 billion with the support of its largest shareholder. UBS Group AG has offered to acquire Credit Suisse Group AG for up to $1 billion.
Credit Suisse, which had a market value of approximately $7.4 billion francs ($8 billion) as of Friday, believes the offer is too low and would harm shareholders and employees who have deferred stock, according to individuals familiar with the matter.
The UBS offer was conveyed on Sunday with an in-stock price of 0.25 Swiss francs per share. According to the Financial Times, UBS also insisted on a material adverse modification that nullifies the agreement if its credit default spreads increase by 100 basis points or more. Friday’s closing price for Credit Suisse was down 8% to 1.86 Swiss francs.
In the past week, panicked investors dumped Credit Suisse’s shares and bonds, sending shock waves through the global financial system, as a result of the failure of a number of minor U.S. lenders. Swiss authorities are attempting to broker an agreement that would address Credit Suisse’s precipitous decline, which sent shock waves through the global financial system. The Swiss central bank’s liquidity support temporarily halted the declines, but the market drama entails the risk that clients or counterparties will continue to evacuate, with potential repercussions for the industry as a whole.
Also read: George Floyd Killer Derek Chauvin Pleads Guilty To Tax Evasion
Swiss and American authorities have weighed in on what would be the first merger of two global systemically significant institutions since the financial crisis, according to individuals familiar with the matter. After a week in which clients withdrew funds and counterparties withdrew from some transactions with Credit Suisse, discussions accelerated on Saturday, with all parties seeking a solution that can be executed swiftly.
