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In the minds of the Swiss population, Credit Suisse (CS) has already inherited UBS. However, the merger could take months to complete. And although the offer is already open – there is one UBS share for every 22.48 CS shares – CS shares remain in free trade.
Therefore, investors can purchase CS shares directly on the Swiss Stock Exchange or indirectly through American Depositary Receipts (ADRs) on the New York Stock Exchange.
From where? “The trading of the stock could have been suspended at the request of Credit Suisse or UBS,” SIX media spokesperson Jürg Schneider told Cash. Swiss securities service provider SIX emphasizes that the issuer decides whether the shares will be delisted. Trading of CS shares will continue as long as the transfer of CS shares to UBS is not completed. This has also been confirmed by UBS.
A “lame duck” at SMI
This leads to a strange situation: the CS share remains in the Swiss Market Index (SMI), the “Olympic share” of the strongest Swiss companies. But CS doesn’t really strengthen the SMI index: the CS price has dropped by almost 90 percent within a year. From CHF 7.18 on March 20, 2022 to CHF 0.82 on March 19, 2023.
SIX will decide on the compilation of the SMI in mid-June, after which any changes will take effect in mid-September. Therefore, CS shares will no longer have to be traded until the end of June. Who will be included in SMI instead of CS is currently completely unclear.
This may explain why the merger between CS and UBS is being pushed forward with all its strength and is said to be around a month’s time. However, it is unclear why CS did not delist the stock, especially since the bank could hardly influence its own share value independently.
CS share depends on value of UBS share
Shares are currently trading at the company’s agreed valuation. However, this value fluctuates depending on the price of the UBS shares that CS shareholders received in exchange for the merger. However, it is not always compatible.
UBS shares cost CHF 17.26 on Friday evening. For comparison: On March 21, 2023, two days after the announcement of the acquisition of CS, UBS shares closed at CHF 19.42. Since then, UBS stock has fallen slightly as investors weigh potential long-term earnings gains against the costs and risks of acquiring a losing competitor.
There is still movement in the CS share itself. CS stock closed at 0.76 francs on Friday evening, down five percent from the previous day. A rise is not happening for now after the strengthening UBS stock. In addition, there is still a great uncertainty in the banking sector. Bad times for bank stocks.
For former CS shareholders, whose stakes in an expanded UBS will be drastically reduced, there is nothing left to wait and see. A sale is not worth much because the loss is so great; There is still hope for future gains in UBS shares. This depends on how successful the integration of CS into UBS is.
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.
