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As soon as UBS decides to take over Credit Suisse (CS), UBS starts “cleaning up”. First, the new super UBS points to a controversial CS deal in the United States.
The acquired competitor had planned to leave the US investment banking business. Former board member Michael Klein (60) also has a finger on the cake. Now UBS is apparently still seeing a benefit in CS investment banking.
UBS is reviewing this deal, as reported by the Financial Times (FT). “Because when the selling bank put a gun to its head, the deal was closed. We are no longer in that position,” a UBS source told the newspaper. “We are not here to enrich Michael Klein at the expense of our shareholders.”
Klein runs a consulting firm. This standalone unit should be integrated into CS First Boston (CSFB). At the same time, much of the business should be handed over to the CSFB, with takeover advice and placement of the bonds. The idea came from Klein himself, according to finance blog Inside Paradeplatz.
Announced in October: Michael Klein, formerly CS board member, will leave the board to launch CS First Boston as an advisor to Group CEO Ulrich Körner.
CS had agreed to buy M Klein & Company, which has 45 employees, for $175 million. Klein himself should receive ten million for advice on restructuring the investment bank.
Now UBS has assembled a team of attorneys to cancel the contract with Klein as cheaply as possible. In particular, the Financial Times continues to be examined whether it can cancel or negotiate a termination fee owed to Klein.
According to another insider, Klein contacted UBS soon after the acquisition. He understands that the split will not be done at best.
It is still unclear what exactly UBS intends to do. In an interview with analysts Sunday evening, CEO Ralph Hamers (57) said: “Credit Suisse’s strength in the tech sector, particularly in the US and the future, fits so well with our strategy that we know tech entrepreneurs are the wealth creators of the world’s future.”
At the same time, UBS Chairman Colm Kelleher (65) said at a press conference on Sunday that they plan to scale down their combined investment banking. So the by-product idea doesn’t seem to be off the table yet.
UBS and Credit Suisse declined to comment to the FT, as did a Klein spokesperson.
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.
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