The Swiss government is considering taking over all or most of the troubled bank Credit Suisse if no deal is made with the bank UBS. This is reported by economic news agency Bloomberg. Earlier today, Credit Suisse reportedly rejected a takeover bid from UBS.
Switzerland’s two largest banks have been discussing a possible takeover with each other and with the Swiss government for days. According to the Financial Times, UBS today offered $1 billion to acquire Credit Suisse, but Credit Suisse would not have agreed.
Some people involved told the newspaper that the terms of the takeover were unfair to Credit Suisse and there has been criticism of the possible circumvention of takeover laws. The Swiss government is said to be planning to change laws so that the consent of UBS shareholders is not required. Normally, they should be given six weeks to assess the takeover.
Credit Suisse ended Friday with a market value of 7.4 billion Swiss francs, about $8 billion. So UBS’ offer is a fraction of that.
Insiders report to Bloomberg that Credit Suisse thinks the offer is far too low. This would also disadvantage shareholders and employees who are still entitled to payment of the shares, according to the sources.
Loan of 50 billion
Credit Suisse is in deep trouble and saw its value drop by a quarter last week. Credit Suisse received a loan of more than 50 billion euros from the Swiss central bank to stay afloat. That loan could not prevent the share price of the bank from continuing to fall and customers of the bank withdrawing their money en masse.
Credit Suisse was hit by the collapse of US banks Silicon Valley Bank and Signature Bank. The collapse of those banks and the problems at Credit Suisse have led to great unrest in the financial markets.
- Swiss government meets on Credit Suisse, possible takeover by UBS
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