Swiss authorities continued their efforts to rescue ailing Credit Suisse on Sunday. The negotiations are tough, said a person familiar with the matter. The Financial Times also reported that UBS had offered to buy its smaller rival for up to $1 billion. This offer was revealed according to “Bloomberg” reports. On Friday, the major Swiss bank was still worth eight billion francs on the stock exchange.
Should an agreement be reached, the deal between the two largest banks in Switzerland could be signed as early as Sunday evening. The authorities tried to come up with a solution before the stock market started on Monday. But there is no guarantee that the terms will remain the same or that an agreement will be reached, the newspaper said.
A takeover of Credit Suisse by UBS would be subject to a number of conditions. A prerequisite for this is state guarantees for UBS worth billions, said a person familiar with the matter on Saturday to the Reuters news agency. One of the insiders said that the state guarantees are in the order of around six billion dollars. Depending on the terms of the transaction, it could be more or less. The guarantees would cover the cost of winding up parts of Credit Suisse and possible other risks, two people said. If the takeover comes about, 10,000 jobs would have to be cut. Spokesmen for Credit Suisse, UBS and the Swiss Ministry of Finance declined to comment or could not be reached.
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