UBS Group AG UBS has offered to buy Credit Suisse Group AG CS for up to $1 billion, according to the Financial Times.
Sources told the publication that UBS' offer was communicated on Sunday morning with a price of 0.25 francs a share to be paid in UBS stock. The deal would be priced at a fraction of the closing price of Credit Suisse on Friday.
Credit Suisse believes that the offer is too low and would hurt shareholders and employees who have deferred stock, according to people familiar with the matter.
UBS has insisted on a material adverse change that would void the deal if its credit default spreads jump by 100 basis points or more.
The terms have been heavily influenced by the Swiss National Bank and the Swiss National Bank, according to the Financial Times. There is no guarantee that a deal will be reached or that the terms will remain the same because of the fact that the situation has been moving very quickly.
The Swiss government would change the country's laws to avoid a shareholder vote on the transaction after approval of the offer. The takeover would have to take emergency measures to allow the takeover to proceed and introduce legislation that would skip the six-week consultation period required for UBS shareholders.
The proposed all-share deal between the two banks is expected to be signed on Sunday evening.
UBS has a market value of $56.6 billion. On Friday, shares in Credit Suisse closed with a value of $8 billion.
Bloomberg reported that UBS executives had opposed an arranged combination with Credit Suisse because they wanted to focus on UBS' wealth-centric strategy. They were not willing to take risks related to Credit Suisse.
Credit Suisse had previously requested the support of Swiss National Bank after losing 30% of its stock value.
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