According to a report by the Financial Times, UBS Group AG has offered to buy Credit Suisse for up to $1 billion, and the Swiss government is planning to change the country’s laws to bypass a shareholder vote on the deal. The proposed all-share deal between Switzerland’s two biggest banks is expected to be signed as soon as Sunday evening, and the deal will be priced at a fraction of Credit Suisse’s closing price on Friday.
The offer was made on Sunday morning with a price of 0.25 Swiss francs ($0.27) a share to be paid in UBS stock, according to people familiar with the matter. Credit Suisse’s shares closed at 1.86 Swiss francs on Friday. UBS has also insisted on a ‘material adverse change’ clause that voids the deal in the event its credit default spreads jump by 100 basis points or more.
UBS is examining a takeover of Credit Suisse that could see the Swiss government offer a guarantee against the risks involved, two people with knowledge of the matter told Reuters on Saturday.
While Credit Suisse declined to comment, UBS Group and the Swiss government did not immediately respond to Reuters request for comment.
This potential takeover could have major implications for the Swiss banking industry, and it will be interesting to see how it evolves in the coming days and weeks. It is noteworthy that the Swiss government is willing to change its laws to make this deal happen, which highlights the importance of the banking sector to the country’s economy.