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At the media conference on the urgent takeover of Credit Suisse by UBS on Sunday evening, those involved looked exhausted, as if they were standing side by side. It’s not surprising when you consider that they had previously fought days and nights for the future of the Swiss banking centre.
The British “Financial Times” now tracks the final days of CS in detail. Backed by insider information from various top stakeholders, the article reads like a thriller.
Main characters: UBS President Colm Kelleher (65). The Irishman is actually a happy St. Patrick’s Day weekend. Then the Swiss state, represented by CS President Axel Lehmann (64) and Finance Minister Karin Keller-Sutter (59), the Swiss National Bank (SNB) under Thomas Jordan (60), and the Financial Market Authority (Finma) under Marlene Amstad ( 55). The “Financial Times” refers to the representation of the Swiss state as the “trinity” in reference to the Bible.
The deal just wasn’t an option
Axel Lehmann was quoted by Trinity last Wednesday. Even then, KKS and his comrades made a clear statement to the CS president: “You will unite with UBS. It’s not optional.”
Kelleher by Thursday at the latest. Patrick knew nothing would come of the weekend. According to the information received from “Financial Time”, the phone of the President of UBS rang at 16:00. There was Trinity on the wire. Now it was up to UBS to find a solution to save the sick opponent.
However, UBS probably did not consider including Credit Suisse. Rather: their CS counterparts were left in complete darkness.
There were other problems with communication as well. UBS struggled with IT issues. Emails took longer than usual until they finally reached the recipient. The report says it’s better to pick up the phone, according to desperate superiors.
Lehmann takes a pen and paper
CS-VR President Lehmann was fed up at one point. Instead of picking up the phone on Saturday evening, she took pen and paper. Very old-fashioned, he wrote a letter to Kelleher and Trinity.
The letter was drafted by CS attorney Markus Diethelm, who later also worked for UBS. The two gentlemen explained in the letter why the planned “transaction” was unacceptable. Among other things, UBS’s insistence on an exit item in CS was not well received.
The letter even contained a threat: CS’ three largest shareholders – two from Saudi Arabia and one from Qatar – expressed their “extreme unease”. They demanded a fair price, a vote for the deal, and the removal of all release clauses. In addition, both Saudis and Qataris are important customers of both banks.
Initially, UBS offered $1 billion for the takeover. However, CS turned down the offer. Eventually the sale amounted to 3.25 billion francs. In return, UBS received more guarantees from the government.
So UBS is still a bargain. It was “an offer we couldn’t refuse,” one of the negotiating team told the Financial Time.
In contrast, a CS consultant finds the result “unacceptable and ugly”. This is “a complete disregard for corporate governance and shareholder rights”.
Almost no face-to-face meetings
Although the offices of the managers of the two major banks were almost opposite each other on Paradeplatz, the two sides rarely met face-to-face. Most of the meetings were held via Zoom.
Code names were used in the meetings. At UBS, the CS was called “Cedar” and he was called “Ulmus”. CS bosses called themselves “Como”, UBS management was “Geneva”.
After all, despite all the hustle and bustle, Kelleher managed to briefly celebrate Ireland’s rugby victory at the Grand Slam. But he was only allowed to buy himself a pint of Guinness at the James Joyce Pub in Zurich.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
