UBS, fresh off its acquisition of Credit Suisse, finds itself amidst yet another storm. The tumultuous takeover, that many saw as a bargain, has stirred the emotions and anger of hundreds of individual shareholders, including those who once worked loyally for the bank.
On Monday, in the hallways of Zurich’s commercial court, these shareholders are prepping to strike back.
The Heart of the Conflict
The foundation of this fiery confrontation lies in the fact that around 500 equity investors of Credit Suisse felt the sting of significant losses when UBS swooped in to the rescue.
Orchestrated by Swiss authorities, this takeover conveniently sidestepped the shareholders’ rights to voice their opinions or have any say in the process.
And the $3.4bn that UBS dished out for Credit Suisse? It was merely a shadow of the bank’s actual worth, barely reaching half its market value a day prior to the deal, making the acquisition seem more like a steal than a business move.
But, that’s not all. UBS finds itself the target of not one, but multiple class action lawsuits, making this recent challenge the second salvo from Credit Suisse shareholders. Add to that, several bondholders, now finding their pockets emptier, are drawing their legal swords.
Yet, just last week, UBS seemed confident, announcing that it no longer depended on government support for its acquisition, possibly hoping to pacify public discontent ahead of the national elections.
But with the Swiss Investor Protection Association (SASV) planning to escalate the case, UBS might just find the ground shakier than it expected.
A Potential Multibillion-Dollar Blow
Arik Röschke, the voice at the helm of the SASV, hinted that UBS could find an out-of-court settlement tempting.
Why? A win for the claimants in court could see UBS scrambling to reimburse all shareholders, which could blow a multibillion-dollar hole in their coffers. But a quiet settlement? It’d only require compensation for the clamoring claimants.
The global breadth of this outcry is notable. Investors aren’t just Swiss locals but span from the UK, the US, Germany, all the way to Thailand and Dubai.
Many of these voices are echoes from Credit Suisse’s past – former employees, who, as part of their compensation, were once handed shares of the bank they served.
Some of these very shareholders, now stand at the cusp of financial despair, having witnessed their once valuable shares plummet in value during the UBS takeover. Their loyalty, once a badge of honor, now feels like a costly mistake.
For these aggrieved investors, the SASV has come forth as a beacon, running its operations not for profit, and merely seeking a nominal fee to cover potential costs. With the reputable Swiss law firm, Niedermann Rechtsanwälte, on their side, they aim to restore some semblance of justice.
Yet, as the echoes of this battle reverberate, it’s worth noting that this isn’t the sole battle UBS needs to worry about. Other legal entities, like the Lausanne-based LegalPass, backed by the Ethos Foundation, have already laid down their claims.
Couple that with at least two reputed law firms representing wiped-out bondholders and an enraged Credit Suisse staff contemplating their own legal recourse over canceled bonuses, and UBS might just find itself in a quagmire.
