UBS, Switzerland's largest financial institution, has proposed acquiring Credit Suisse (CS), which is facing a liquidity crisis, for up to $1 billion (approximately 1.3 trillion KRW).
Foreign media including the Financial Times (FT) reported on the 19th (local time), citing multiple sources, about this acquisition proposal. It is expected that the acquisition contract will be signed as early as that evening.
The acquisition price proposed by UBS is 0.25 Swiss francs per share, which is significantly lower than CS's market value based on the closing price of 1.86 Swiss francs per share last Friday, the 17th. Additionally, UBS is reportedly demanding a clause that would nullify the deal if the CDS (Credit Default Swap) spread rises by more than 100 basis points.
Sources said that authorities are pushing to finalize the contract before the Asian financial markets open to prevent market turmoil. Swiss authorities are currently preparing measures to simplify UBS's CS acquisition process and emergency plans related to antitrust reviews by competition authorities.
The Wall Street Journal (WSJ) reported, "One option is to acquire the entire CS and then spin off the local Swiss business as an independent entity. In this case, UBS would maintain CS's asset management business," adding, "Discussions are ongoing. The outline of the deal could change depending on the level of government guarantees."
However, CS is reportedly negative about UBS's proposal. Vincent Kaufmann, CEO of the Ethos Foundation, which represents Swiss pension funds owning shares in CS and UBS, stated, "I do not believe our members and UBS shareholders will be pleased with this," and criticized, "We have never seen such a measure. It shows how bad the situation is."
Bloomberg also reported, citing sources, that CS opposes UBS's offer, arguing that the proposed price is too low and could harm shareholders and employees.
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