UBS 'agrees to buy Credit Suisse after increasing its offer to more than $2billion'

UBS has agreed to buy Credit Suisse after increasing its offer to more than $2 billion following urgent talks today.

The banking giant will pay more than 0.50 francs ($0.5401) a share in its own stock, far below Credit Suisse’s closing price of 1.86 francs on Friday, FT reported, citing sources.

According to the report, UBS has agreed to a softening of a material adverse change clause that would void the deal if its credit default spreads jump.

The agreement follows meetings earlier today in Bern between the Federal Council, the Swiss National Bank, UBS and Credit Suisse to settle the future of the bank.

The Financial Times, which was the first on Friday to report the prospect of Switzerland’s biggest bank swallowing up Credit Suisse, said UBS had offered to buy it for up to $1billion (£820mn).

The transaction would be worth 25 cents (0.23 Swiss francs) per Credit Suisse share, the FT said.

But the 167-year-old bank pushed back on UBS’ initial offer, with the support of its largest shareholder, believing that it was too low and settling on $2bn.

Authorities urged UBS to get the deal over the line before the stock exchange reopened on Monday in order to reassure investors and avoid a spread of panic on the markets. A merger of this scale would usually take months to complete.

Source of data and images: dailymail