Swiss regulators are going to expedite the takeover of troubled Credit Suisse (NYSE: CS) by UBS, foregoing shareholder consultations in order to solidify a deal before markets open on Monday.
According to people familiar with internal discussions cited by the Financial Times, UBS said it’s going to use emergency measures to circumvent an otherwise mandatory six-week consultation period with shareholders, and instead proceed with the acquisition of Credit Suisse without a shareholder vote. Swiss regulator Finma and the Swiss National Bank both indicated that a takeover deal with UBS is the only way to salvage what confidence is left in Credit Suisse.
On Saturday night, the Swiss cabinet hosted a series of meetings in Bern with the Swiss National Bank, Finma, and other representatives from the banking sector in an effort to to come to an agreement. UBS, for its part, wants to absolve any potential capital demands it could face under global rules, as well as secure government funding for any future legal expenses. Still, UBS has concerns regarding the takeover of Credit Suisse’s investment portion, as it has been the subject of numerous losses and scandals.
The fast-tracked deal comes shortly after the Swiss central bank issued 50 billion Swiss francs in an emergency credit line to the distraught bank in order to prevent a collapse in the share price. The move failed to quell market concern, though, and outflows soared to $10.8 billion last week. Back in 2022, Credit Suisse had about 1.2 billion Swiss francs set aside for legal matters, but thanks to new regulatory probes, it could face an additional 1.2 Swiss francs in costs.
Information for this briefing was found via the Financial Times. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.