NEW DELHI: UBS extension has agreed to buy Credit Suisse after increasing its offer to more than $2 billion, the Financial Times reported on Sunday.
UBS Group AG has been in emergency talks to buy the Swiss banking giant as authorities try to stave off turmoil when markets reopen on Monday.
Previously, reports said UBS had offered to pay up to $1 billion.
However, Credit Suisse, which closed on Friday with a market value of about 7.4 billion francs ($8 billion), believes the offer is too low and would hurt shareholders and employees who deferred shares. , people familiar with the matter told Bloomberg.
Officials raced to save the 167-year-old bank, among the world’s largest asset managers, after a brutal week that saw the second and third US bank failures in history. As one of 30 global banks considered systemically important, any deal for Credit Suisse could spill over into global financial markets.
At least two major banks in Europe are examining scenarios of contagion that could spread to the region’s banking sector and expect the Federal Reserve and European Central Bank to step in with stronger signs of support, two senior executives familiar with the discussions told Reuters. .
If the takeover falls apart, Switzerland is considering either taking over the bank in full or owning a significant stake, Bloomberg reported.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-share deal could be signed on Sunday. Citing people familiar with the matter, he said an offer made on Sunday was 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday’s closing price of 1.86 francs. Swiss and nearly wiping out the bank’s existing shareholders.
UBS also insisted on a “material adverse change” that would cancel the deal if its credit default spreads jump 100 basis points or more, the report added. He said there was no guarantee terms that they would stay the same or that an agreement would be reached.
A person familiar with the talks earlier told Reuters that UBS has asked the Swiss government for $6 billion as part of a possible buyout of its rival. The guarantees would cover the cost of liquidating parts of Credit Suisse and potential legal costs.
A source earlier said talks were running into significant hurdles and 10,000 jobs could be cut if the two banks merge. THE Swiss Association of Bank Employees on Sunday he called for the immediate creation of a task force to address the risk to jobs.
Swiss broadcaster SRF and other media outlets said the government would hold an “important” press conference later on Sunday. They did not provide further details.
Credit Suisse shares lost a quarter of their value last week. The bank has been forced to draw on $54 billion in central bank funding as it tries to recover from scandals that have sapped investor and customer confidence.
UBS Group AG has been in emergency talks to buy the Swiss banking giant as authorities try to stave off turmoil when markets reopen on Monday.
Previously, reports said UBS had offered to pay up to $1 billion.
However, Credit Suisse, which closed on Friday with a market value of about 7.4 billion francs ($8 billion), believes the offer is too low and would hurt shareholders and employees who deferred shares. , people familiar with the matter told Bloomberg.
Officials raced to save the 167-year-old bank, among the world’s largest asset managers, after a brutal week that saw the second and third US bank failures in history. As one of 30 global banks considered systemically important, any deal for Credit Suisse could spill over into global financial markets.
At least two major banks in Europe are examining scenarios of contagion that could spread to the region’s banking sector and expect the Federal Reserve and European Central Bank to step in with stronger signs of support, two senior executives familiar with the discussions told Reuters. .
If the takeover falls apart, Switzerland is considering either taking over the bank in full or owning a significant stake, Bloomberg reported.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-share deal could be signed on Sunday. Citing people familiar with the matter, he said an offer made on Sunday was 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday’s closing price of 1.86 francs. Swiss and nearly wiping out the bank’s existing shareholders.
UBS also insisted on a “material adverse change” that would cancel the deal if its credit default spreads jump 100 basis points or more, the report added. He said there was no guarantee terms that they would stay the same or that an agreement would be reached.
A person familiar with the talks earlier told Reuters that UBS has asked the Swiss government for $6 billion as part of a possible buyout of its rival. The guarantees would cover the cost of liquidating parts of Credit Suisse and potential legal costs.
A source earlier said talks were running into significant hurdles and 10,000 jobs could be cut if the two banks merge. THE Swiss Association of Bank Employees on Sunday he called for the immediate creation of a task force to address the risk to jobs.
Swiss broadcaster SRF and other media outlets said the government would hold an “important” press conference later on Sunday. They did not provide further details.
Credit Suisse shares lost a quarter of their value last week. The bank has been forced to draw on $54 billion in central bank funding as it tries to recover from scandals that have sapped investor and customer confidence.
