The Swiss authorities are considering a full or partial nationalization of Swiss credit as the only other viable option outside of the UBS acquisition. The country is considering taking over the bank in its entirety or having a significant shareholding if the acquisition by UBS falls apart due to the complexities in organizing the deal and the short period of time involved.
There are multiple complexities in an acquisition of UBS, including thorny issues such as a government endorsement that would cover potential legal and other losses. UBS is asking the Swiss government to bear certain legal costs and potential future losses on any acquisition, a total amount that could be as high as $6 billion, Bloomberg has reported.
A few hours before it was known that UBS had presented its purchase offer for its rival, Credit Suisse, valued at 1,000 million dollars (932 million euros). Swiss authorities plan to change the country’s laws to circumvent a shareholder vote on the transaction as they rush to finalize a deal before Monday.
The offer presented a few hours ago contemplates the payment of 0.25 Swiss francs per share, lower than the 1.86 Swiss francs at which the entity’s titles closed last Friday. UBS has also insisted on a material adverse change that voids the deal if its credit default spreads rise by 100 basis points or more.
To speed up the acquisition, the Swiss government is preparing emergency measures and plans to introduce legislation that will bypass the normal six-week consultation period required for UBS shareholders, so that the deal can be closed immediately, the Financial Times reports.
