Shares of Credit Suisse, a Swiss bank with a history of more than 160 years, rose unexpectedly amid news of a potential takeover by State Street, a U.S. banking and financial holding company. Will State Street really buy Credit Suisse?
- Markets circulated information about the acquisition of Credit Suisse for the amount of 9 Swiss francs per share. Sources say that the purchase offer may be made quickly;
- The premium for the takeover of Credit Suisse in relation to the current valuation of the shares at around CHF 6.80 would be well over 30%. According to sources, the takeover is not hostile and is taking place on a 'friendly footing', which may affect the likelihood of a successful completion of the transaction;
- Credit Suisse is one of the largest banks in Switzerland, the company is traditionally headquartered in Zurich. State Street, based in Boston, also has a long history that dates back nearly 220 years;
- State street has some of the world's leading positions in securities management. The company has 40,000 employees worldwide, a smaller number than Credit Suisse, which has more than 50,000 employees. The acquisition will be one of the largest in State Street's history, the companies are similar in size.
Credit Suisse CSGN.CH shares, D1 interval. The company's shares tried to recover from the avalanche fall caused by the coronavirus pandemic, but the attempt ended in failure at the end of 2020 and supply pushed the bulls back. Today we are seeing valuations at the spring 2020 panic peaks which may indicate an attractive merger moment for State Street. Credit Suisse's price-to-book ratio currently stands at 0.38 which suggests fundamental undervaluation of the company's shares. With such a low p/b ratio, the 30% premium to current valuations may prove insufficient for the Swiss who may leave space for further negotiations. Source: xStation5
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