Post by anenro on Mar 20, 2023 17:14:11 GMT 4
HERE'S THE LIST OF CREDIT SUISSE TOP 40 SHAREHOLDERS WHO SEEM NOW TO BE FACING 2 OPTIONS: 1) A 25 cents offer by UBS; 2) A nationalisation which would bring the stock value to ZERO.
Indeed, just hours after it was floated that UBS could buy Credit Suisse for $1BN, a proposal which the bank's shareholders balked at, Bloomberg reported that authorities are now considering a full or partial nationalization of Credit Suisse - an outcome which would wipe out the equity and bail-in bondholders - as the only other viable option outside a UBS Group AG takeover.
According to BBG, "the country is considering either taking over the bank in full or holding a significant equity stake if a takeover by UBS Group AG falls apart because of the complexities in arranging the deal and the short time frame involved."
With just hours left until futures reopen for trading, UBS has offered to buy Credit Suisse for up to $1BN the FT first reported, with Swiss authorities planning to change the country’s laws to bypass a shareholder vote on the transaction as they rush to finalize the deal engineered to restore trust in the banking system.
The take-under offer was communicated on Sunday morning with a price of CHF0.25 a share to be paid in UBS stock, far below Credit Suisse’s closing price of CHF1.86 on Friday. And while the current terms value Credit Suisse’s equity at a paltry $1BN, the figure does not reflect additional provisions of around $6 billion from the Swiss National Bank to ensure the deal is done.
In other words, UBS gets an explicit $6BN central bank backstop, pays $1BN and gets a megabank whose Zurich headquarters alone is probably worth more.
The all-share deal between the two biggest Swiss banks is set to be signed as soon as Sunday evening and will be priced at a fraction of Credit Suisse’s closing price on Friday, all but wiping out the target’s shareholders, FT sources said. They also noted that in an unexpected twist, there will be a very unique material adverse exit clause: if UBS credit default spreads jump by 100 basis points or more, the deal is off! In other words, if the market balks at the pro forma deal and believes more contagion is coming, UBS wants none of it, and the Swiss government and SNB can deal with the fallout.
Source: Bloomberg, www.zerohedge.com
Indeed, just hours after it was floated that UBS could buy Credit Suisse for $1BN, a proposal which the bank's shareholders balked at, Bloomberg reported that authorities are now considering a full or partial nationalization of Credit Suisse - an outcome which would wipe out the equity and bail-in bondholders - as the only other viable option outside a UBS Group AG takeover.
According to BBG, "the country is considering either taking over the bank in full or holding a significant equity stake if a takeover by UBS Group AG falls apart because of the complexities in arranging the deal and the short time frame involved."
With just hours left until futures reopen for trading, UBS has offered to buy Credit Suisse for up to $1BN the FT first reported, with Swiss authorities planning to change the country’s laws to bypass a shareholder vote on the transaction as they rush to finalize the deal engineered to restore trust in the banking system.
The take-under offer was communicated on Sunday morning with a price of CHF0.25 a share to be paid in UBS stock, far below Credit Suisse’s closing price of CHF1.86 on Friday. And while the current terms value Credit Suisse’s equity at a paltry $1BN, the figure does not reflect additional provisions of around $6 billion from the Swiss National Bank to ensure the deal is done.
In other words, UBS gets an explicit $6BN central bank backstop, pays $1BN and gets a megabank whose Zurich headquarters alone is probably worth more.
The all-share deal between the two biggest Swiss banks is set to be signed as soon as Sunday evening and will be priced at a fraction of Credit Suisse’s closing price on Friday, all but wiping out the target’s shareholders, FT sources said. They also noted that in an unexpected twist, there will be a very unique material adverse exit clause: if UBS credit default spreads jump by 100 basis points or more, the deal is off! In other words, if the market balks at the pro forma deal and believes more contagion is coming, UBS wants none of it, and the Swiss government and SNB can deal with the fallout.
Source: Bloomberg, www.zerohedge.com
