UBS Group AG is offering to buy Credit Suisse Group AG for as much as $1 billion, a deal that the troubled Swiss firm is pushing back with backing from its biggest shareholder.
Credit Suisse ended Friday with a market value of 7.4 billion francs $8 billion, but it believes that the offer is too low and will hurt shareholders and employees who have deferred stock, according to people with knowledge of the matter.
The price of the UBS shares was reported on Sunday with a price of 0.25 francs a share to be paid in stock. The Financial Times reported that UBS insisted on a material adverse change that voids the deal if its credit default spreads jump by 100 basis points or more. Credit Suisse closed at the close of Friday, down 8% to 1.86 francs.
Swiss authorities are trying to broker a deal that would address the rout in Credit Suisse that sent shock waves across the global financial system over the past week when panicked investors dumped their shares and bonds after the collapse of several smaller US banks. A Swiss central bank temporarily stopped the declines, but the market drama carries the risk that clients or counterparties would continue to flee, with potential ramifications for the broader industry.
Since the financial crisis, the discussions over what would be the first combination of two global systemically important banks have seen Swiss and US authorities weigh in, according to people with knowledge of the matter. Talks accelerated Saturday with all sides pushing for a solution that can be executed quickly after a week when clients pulled money and counterparties step back from some dealings with Credit Suisse.