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UBS Group AG is offering to buy Credit Suisse Group AG for up to $1 billion, a deal the struggling Swiss company is pushing back with the backing of its largest shareholder.
Credit Suisse, which closed Friday with a market value of around 7.4 billion francs ($8 billion), believes the offer is too low and would hurt shareholders and employees who have deferred shares, according to people familiar with the case.
UBS’s offer was communicated on Sunday with a price of 0.25 francs per share to be paid in shares. UBS also insisted on a material adverse change that voids the deal if its credit default spreads increase by 100 basis points or more, the Financial Times reported. Credit Suisse closed down 8% to 1.86 francs at the close on Friday.
Swiss authorities are seeking to negotiate a deal that would resolve a Credit Suisse rout that sent shockwaves through the global financial system over the past week when panicked investors dumped its stocks and bonds following the collapse of several small US lenders. A backstop from the Swiss central bank briefly halted the declines, but the market drama carries the risk that customers or counterparties will continue to flee, with potential ramifications for the wider industry.
The complex discussions over what would be the first combination of two global systemically important banks since the financial crisis have seen Swiss and US authorities intervene, according to people familiar with the matter. Talks accelerated on Saturday, with all parties pushing for a solution that can be executed quickly after a week in which clients withdrew money and counterparties withdrew from some transactions with Credit Suisse.
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