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- UBS is offering to pay up to $1 billion to buy Credit Suisse, the Financial Times reported.
- UBS has been in talks this weekend about buying some or all of its troubled Swiss rival.
- The terms of the deal could still change in a rapidly developing situation, per the FT.
UBS is proposing to pay up to $1 billion to rescue its troubled Swiss rival Credit Suisse, the Financial Times reported Sunday.
Swiss regulators plan to make an emergency change to laws so it can avoid a shareholder vote on the deal to speed up the process before markets open on Monday, per the report.
The all-share deal is expected to be finalized by Sunday night and will be worth far less than Credit Suisse’s market value of about $9.5 billion on Friday, according to unnamed sources who spoke to the FT. The deal would mean investors’ stakes in the bank are close to worthless.
The terms of the deal could still change as the situation is rapidly developing, those sources told the newspaper.
UBS is understood to want a clause that would void a deal if markets deem it to be too risky and send the cost of its default protection soaring.
UBS was considering whether to acquire part or all of Credit Suisse on Friday, the FT first reported. The Swiss National Bank and Swiss regulators helped arrange the talks in a bid to boost confidence in the country’s banks, it said.
The rescue deal comes a week after Silicon Valley Bank collapsed, which had a ripple effect through the banking sector and rattled investors who feared other banks could follow suit.
Shares in Credit Suisse fell dropped 24% on Wednesday after its largest shareholder, Saudi National Bank, warned it wouldn’t be able to invest more cash in the bank because of regulatory hurdles.
On Thursday it secured a $50 billion lifeline from the Swiss National Bank and its shares jumped by a fifth, only to drop a further 8% on Friday.