Credit Suisse closed down 8% at 1.86 Swiss francs on Friday
UBS Group AG has offered to buy Credit Suisse Group AG for as much as $1 billion, a deal the embattled Swiss company backed by its biggest shareholder has opposed.
Credit Suisse, which had a market value of around 7.4 billion Swiss francs ($8 billion) at Friday’s close, believed the offer was too low and would hurt shareholders and employees holding deferred shares, according to people familiar with the matter.
On Sunday, UBS communicated the offer at a price paid in shares of 0.25 francs per share. UBS also insisted on making a material adverse change that voids the deal if its credit-default spread jumps by 100 basis points or more, the Financial Times reported. Credit Suisse closed down 8 percent at 1.86 Swiss francs on Friday.
Swiss authorities are seeking to broker a deal to resolve the Credit Suisse debacle. Crashed investors at Credit Suisse sold its shares and bonds after the collapse of several smaller U.S. banks sent shockwaves through the global financial system over the past week. The SNB’s liquidity support briefly stemmed the decline, but the upheaval in the market raises the risk that clients or counterparties continue to flee, with possible repercussions for the wider industry.
Swiss and U.S. authorities are weighing complex discussions over the first merger of two systemically important global banks since the financial crisis, according to people familiar with the matter. Talks accelerated on Saturday, with all parties pushing for a solution that could be executed quickly a week later, when clients pulled their funds and counterparties pulled out of some deals with Credit Suisse.
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