UBS has offered to purchase crisis-hit Credit Suisse for a sum of up to $1 billion, and the Financial Times has reported that the proposed all-share agreement between the two Swiss banks could be signed as soon as Sunday evening.
The acquisition offer is said to be priced considerably lower than Credit Suisse’s Friday closing price. The bank has been experiencing instability and uncertainty, with its confidence being affected by the recent collapse of Silicon Valley Bank and Signature Bank.
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Crisis-hit Credit Suisse is under pressure from regulators and authorities to find a swift solution due to its global significance.
Both UBS and Credit Suisse are expected to undergo significant changes as a result of the acquisition offer. The Swiss government is reportedly planning to alter the country’s laws to circumvent a shareholder vote on the deal, which would speed up the acquisition process.
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Sources have revealed that UBS proposed an offer on Sunday morning to purchase Credit Suisse at a rate of 0.25 Swiss francs ($0.27) per share, to be paid using UBS stock. This amount is considerably less than Credit Suisse’s closing share price of 1.86 Swiss francs on Friday.
According to the Financial Times, the acquisition offer also includes a condition of a “material adverse change,” which would render the deal void if Credit Suisse’s credit default spreads increase by 100 basis points or more.