NEW DELHI: UBS agreed to buy Credit Suisse after raising its offer to more than $2 billion, the Financial Times reported on Sunday.
UBS Group AG has been in emergency talks to buy the Swiss banking giant as authorities try to head off unrest when markets reopen on Monday.
Earlier, reports said UBS had offered to pay up to $1 billion.
However, Credit Suisse, which closed Friday with a market value of about 7.4 billion francs ($8 billion), said the offer was too low and would hurt shareholders and employees who have deferred actions, people familiar with the matter told Bloomberg.
Officials rushed to save the 167-year-old bank, among the world’s biggest wealth managers, after a brutal week that saw the second and third biggest US bank failures in history. As one of 30 global banks considered systemically important, any deal for Credit Suisse could ripple through global financial markets.
At least two major European banks are looking at contagion scenarios that could spill over into the region’s banking sector and expect the Federal Reserve and European Central Bank to step in with stronger signals of support, Reuters told two senior executives aware of the discussions.
If the takeover falls apart, Switzerland plans to take over the bank in its entirety or hold a large stake, Bloomberg reported.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-stock deal could be signed on Sunday. Citing people familiar with the matter, he said an offer made on Sunday was 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday’s closing price of 1.86 Swiss francs. and virtually wiping out the bank’s existing shareholders.
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 report adds. He said there was no guarantee that the terms would stay the same or that a deal would be reached.
A person familiar with the talks told Reuters earlier that UBS had asked the Swiss government for $6 billion as part of a possible purchase of its rival. The guarantees would cover the cost of liquidating parts of Credit Suisse and potential litigation costs.
A source previously said the talks were facing significant hurdles and that 10,000 jobs could have to be cut if the two banks merge. THE Swiss Association of Bank Employees Sunday called for the immediate creation of a task force to deal with the job risk.
Swiss broadcaster SRF and other outlets reported that the government would hold an “important” press conference later on Sunday. They did not give further details.
Credit Suisse shares lost a quarter of their value last week. The bank has been forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined investor and customer confidence.
UBS Group AG has been in emergency talks to buy the Swiss banking giant as authorities try to head off unrest when markets reopen on Monday.
Earlier, reports said UBS had offered to pay up to $1 billion.
However, Credit Suisse, which closed Friday with a market value of about 7.4 billion francs ($8 billion), said the offer was too low and would hurt shareholders and employees who have deferred actions, people familiar with the matter told Bloomberg.
Officials rushed to save the 167-year-old bank, among the world’s biggest wealth managers, after a brutal week that saw the second and third biggest US bank failures in history. As one of 30 global banks considered systemically important, any deal for Credit Suisse could ripple through global financial markets.
At least two major European banks are looking at contagion scenarios that could spill over into the region’s banking sector and expect the Federal Reserve and European Central Bank to step in with stronger signals of support, Reuters told two senior executives aware of the discussions.
If the takeover falls apart, Switzerland plans to take over the bank in its entirety or hold a large stake, Bloomberg reported.
Credit Suisse and UBS declined to comment, and the Swiss government did not immediately respond to a request for comment.
The Financial Times reported that the all-stock deal could be signed on Sunday. Citing people familiar with the matter, he said an offer made on Sunday was 0.25 Swiss francs ($0.27) per Credit Suisse share, well below Friday’s closing price of 1.86 Swiss francs. and virtually wiping out the bank’s existing shareholders.
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 report adds. He said there was no guarantee that the terms would stay the same or that a deal would be reached.
A person familiar with the talks told Reuters earlier that UBS had asked the Swiss government for $6 billion as part of a possible purchase of its rival. The guarantees would cover the cost of liquidating parts of Credit Suisse and potential litigation costs.
A source previously said the talks were facing significant hurdles and that 10,000 jobs could have to be cut if the two banks merge. THE Swiss Association of Bank Employees Sunday called for the immediate creation of a task force to deal with the job risk.
Swiss broadcaster SRF and other outlets reported that the government would hold an “important” press conference later on Sunday. They did not give further details.
Credit Suisse shares lost a quarter of their value last week. The bank has been forced to tap $54 billion in central bank funding as it tries to recover from scandals that have undermined investor and customer confidence.
