Key Points:
- UBS has proposed a transaction worth up to one billion dollars with Credit Suisse.
- The governing bodies of Switzerland intend to amend the laws of their nation in order to circumvent a shareholder vote on the proposed transaction.
There have been recent rumors that USB has made an offer to purchase Credit Suisse with a total price that can go up to one billion dollars.
The British Financial Times reported on March 19 that UBS made an offer to purchase Credit Suisse for a price of up to one billion dollars in United States currency. While the Swiss authorities are eager to finish the merger by Monday, they are seeking to amend the rules of their nation in order to avoid having shareholders vote on the proposed agreement.
Those who are aware with the situation claim that discussions on the takeover bid took place between the two parties on Sunday morning. The price at the end of the day was 1.86 Swiss francs. According to the article, UBS has also insisted on a’material adverse change’ that will render the contract null and invalid in the event that its credit default spreads increase by 100 basis points or more.
Two individuals familiar with the situation told Reuters on Saturday that UBS is investigating the possibility of acquiring Credit Suisse, which may result in the Swiss government providing a guarantee against the risks associated with the transaction. When it became public knowledge earlier this week that Credit Suisse’s most important sponsor, the National Bank of Saudi Arabia, was unable to give more financial assistance, the decline in the company’s stock price began.
According to earlier reports, Credit Suisse declared that it will request a loan of around 54 billion US dollars from the Swiss National Bank in the amount of 50 billion Swiss francs. However, this was not enough to stop the precipitous drop in its share price, which has now reached an all-time low. This occurred after the company’s largest investor stated that they would not be providing any additional capital, and the chairman of the company acknowledged that the company is still losing wealth management clients.
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