by Oliver Hirt, Stefania Spezzati and John O’Donnell
(Reuters) – UBS Group AG was holding emergency talks on Sunday to buy its compatriot Credit Suisse, for up to $1 billion according to press reports, as Swiss authorities tried to avert the risk of turbulence as global markets reopen on Monday.
In the context of the rescue of the second Swiss bank, shaken on the stock market this week, the authorities are examining the possibility of imposing losses on the bondholders of the establishment, two sources familiar with the matter told Reuters.
Credit Suisse and UBS declined to comment on this information while no comment could be immediately obtained from the Swiss government.
According to the Financial Times, the offer all in UBS shares was made on Sunday morning at a unit price of 0.25 Swiss francs, a price well below the closing price of Credit Suisse shares on Friday (1.86 Swiss francs). ).
Bloomberg News reported for its part, citing sources familiar with the matter, that Credit Suisse resisted the offer from UBS, deeming it too low and likely to penalize its shareholders and employees with stock options.
If the offer fails, adds Bloomberg, Switzerland is considering the possibility of taking over the entire bank, or at least a significant stake in its capital.
A source familiar with the talks told Reuters on Saturday that UBS was seeking a guarantee of around six billion dollars (5.6 billion euros) from the Swiss Federal Council for a possible takeover of Credit Suisse. .
As discussions are still ongoing, this amount could be modified because several scenarios are still under study, said this source.
The guarantees are to be used to cover the cost of impairment of certain Credit Suisse assets and possible litigation costs, two sources told Reuters.
Talks to resolve the crisis of confidence around Credit Suisse are facing major hurdles and some 10,000 jobs could be at risk if the two banks merge, one of the sources said.
Swiss regulators are keen to present a solution for Credit Suisse’s future before markets reopen on Monday, the source added.
Sunday on France 3, the French Minister of Economy Bruno Le Maire called for “a rapid, massive and credible solution” to be found.
The 167-year-old institution is among the 30 most important banks in the world from a systemic point of view, and its failure would send shock waves through the entire global financial sector. Credit Suisse’s troubles erupted after the collapse of two US banks, SVB and Signature.
(With John Revill, Gilles Guillaume for the )
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