UBS’s Offer to Purchase Credit Suisse Sparks Controversy Among Shareholders of Swiss Banks
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Swiss banks UBS, the third largest bank in Europe with a market capitalization of $63 billion, and Credit Suisse, an Investment banking company, have been in the news recently after UBS reportedly offered to purchase Credit Suisse for up to $1 billion. However, this proposal has triggered controversy after facing disapproval from some shareholders, who feel it is unfair to Credit Suisse and its investors.
BREAKING: UBS offers to buy Credit Suisse for up to $1 billion, the Financial Times reports https://t.co/i9ZLPrEy3p pic.twitter.com/QGU7R6NRPu
— Bloomberg (@business) March 19, 2023
Swiss bank UBS’s proposal to purchase Credit Suisse deliver right after BlackRock, an investment management company, rejected similar claims.
“BlackRock is not participating in any plans to acquire all or any part of Credit Suisse, and has no interest in doing so,” a company spokesperson told CNBC Saturday morning.
It is worth noting that Swiss bank UBS is offering to pay SFr0.25 per share in UBS stock, which is significantly lower than the closing price of SFr1.86 on March 17th. Swiss bank UBS believes that this price is fair and appropriate, given the current market conditions and the risks involved in the transaction.
Terms of the UBS take over
1. Buy Credit Suisse for up to $1bn i.e. SFr0.25 a share , far below Credit Suisse’s closing price of SFr1.86
2. 6bn Swiss gvt gaurantee
3. Void material adverse change if credit default spreads jump by 100 basis points or more
4. Bypass a shareholder… https://t.co/bTajmUyV1U— Mpumelelo Ndiweni (@mpumiglobal) March 19, 2023
Furthermore, the offer is also subject to certain financial conditions, such as the credit default spreads not jumping by more than 100 basis points, which might cancel the agreement.
Swiss Authorities Aim to Skip UBS Shareholder Vote on Deal
Swiss authorities want to change the country’s laws to skip the need for a UBS shareholder vote and finalize the deal between UBS and Credit Suisse as soon as possible, possibly by March 19th. However, this move has been facing criticism from some who believe it undermines normal corporate governance rules.
Swiss authorities are planning to literally change the country's laws to push through the merger. No UBS shareholder votes. No parliamentary votes. Nothing.
A decision by fiat to save the fiat money system. 🤯
— Coin Bureau (@coinbureau) March 19, 2023
Additionally, some people are unhappy about it because it might not be fair to Credit Suisse’s shareholders.
It is also worth noting that UBS added a condition that could cancel the deal if certain financial factors change. It’s unclear if the agreement will go through, and others believe it would be unfair to Credit Suisse and its shareholders. Others have criticized the proposal to avoid shareholder approval from UBS.
Swiss bank UBS and Credit Suisse haven’t talked much, so the Swiss National Bank and regulator Finma are playing a big role in deciding the deal’s terms. Interestingly, the US Federal Reserve showed a willingness to the deal.
Justin Sun’s Plan to Integrate Credit Suisse into the Crypto World
Tron co-founder Justin Sun is asking $1.5 billion to acquire Credit Suisse and transform it into a crypto-friendly bank.
Justin Sun offered $1.5 billion on Twitter to acquire the troubled Swiss bank.
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visit: https://t.co/byEElTIDIS
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.#Platinx #PTX #justinsun #swissbank #suisse #cryptostar #switzerland #dailymarketupdate #marketingnews #dailycryptoupdate #updateyourselfdaily #news #cryptos pic.twitter.com/h6ZGooyiSk— PlatinX – The Future (@PlatinXOfficial) March 20, 2023
His approach would contribute to the development of a new financial system that is more decentralized and leverages innovative technologies. Unfortunately, Justin Sun loses bid for Credit Suisse to UBS.
