Halali for bargain hunters: “SonntagsZeitung” headlined “CS is a perfect candidate for takeover”. That’s how the debate continues, as the takeover would solve major bank Credit Suisse’s problems in one fell swoop. The outflow of client funds would be stopped.
This way, financing costs can be cut in half and pending litigation can be settled by settlement. In addition, greater cost reductions will be possible. Concretely, around 2,700 administrative positions will no longer be needed. This will save about half a billion Swiss francs per year.
Deutsche Bank and French BNP Paribas are said to be interested in the market. A “reverse takeover” – the small bank swallows the big bank – is also seen as a possible Swiss solution. Bank Julius Baer is mentioned in this context.
Very simple calculation
What makes CS so interesting at first glance for high-finance bargain hunters is its low market cap on the stock market: only 11.8 billion francs. What the newspaper estimates at around CHF 40 billion is a no-brainer compared to the value of the bank after the planned transformation.
But: The computation is not that simple because anyone including CS is buying a lot of trouble at the beginning. Because even a new bank owner would have to layoffs, downsize the investment bank significantly, and bear settlement costs in legal litigation. There are also many legal fees involved in a comparison. If there was a quick and easy recipe for a radical restructuring of the bank, the CS board room would find it and announce it loudly.
Additionally: Whoever wants to buy the bank should make a very good offer to existing shareholders – well above the current stock market price of just under three francs. With the exception of Saudi National Bank, which only became the main shareholder with the latest capital increase, many key shareholders have been around for a long time. This means that if you were to actually sell your shares, you would make up your loss primarily with CS shares. The offer should therefore be very attractive, but again this severely limits profit prospects in the event of a takeover (SDA/koh).