swiss banking giant UBS in on Sunday he offered to buy his beleaguered rival swiss credit for up to $1 billion, according to the Financial Timesciting four people with direct knowledge of the situation.
The deal, which the FT said could be signed as late as Sunday night, values Credit Suisse at about $7 billion less than its closing market value on Friday.
The FT said UBS had offered a price of 0.25 Swiss francs ($0.27) per share to pay on UBS shares. Credit Suisse shares closed Friday at 1.86 Swiss francs. The fast-paced nature of the negotiations means that the terms of any final agreement could be different from those disclosed.
However, Credit Suisse is reportedly resisting the offer, arguing it is too low and would hurt shareholders and employees. people with knowledge of the matter told Bloomberg.
Credit Suisse and UBS declined to comment on the reports when contacted by CNBC.
Swiss authorities are also reportedly considering the full or partial nationalization of the bank as an alternative to the acquisition of UBS, according to a Sunday. Bloomberg report.
The UBS deal is being orchestrated quickly, so the Swiss are preparing in the event it falls through, Bloomberg said, citing people with knowledge of the matter. The country is reportedly considering whether to take over the bank entirely or take a significant equity stake.
The UBS offer comes after Credit Suisse shares registered their worst weekly drop since the start of the coronavirus pandemicdespite the announcement that it would agree to a loan of up to 50 billion Swiss francs ($54 billion) from the Swiss central bank.
I had already been fighting a chain of losses and scandalsand last week sentiment was shaken again with the collapse of Silicon Valley Bank and the closure of Signature Bank in the US, sending shares tumbling.
Credit Suisse’s scale and potential impact on the global economy is far greater than US banks. The Swiss bank’s balance sheet is about twice the size of Lehman Brothers when it collapsed, at around 530 billion Swiss francs at the end of 2022. It is also much more globally interconnected, with multiple international subsidiaries, making a orderly management of Credit Suisse’s situation even more important.
Credit Suisse lost around 38% of its deposits in the fourth quarter of 2022, and disclosed in its annual report delayed early last week that the outputs have yet to be reversed. It reported a full-year net loss of 7.3 billion Swiss francs for 2022 and expects a further «substantial» loss in 2023.
The bank had previously announced a massive strategic review in an attempt to address these chronic problems, with Current CEO and Credit Suisse veteran Ulrich Koerner will take over in July.