Mohamed El-Erian said it is “unwise” for Credit Suisse Group AG to push back on the $1 billion offer from UBS Group AG to take over the troubled lender.
(Bloomberg) — Mohamed El-Erian said it is “unwise” for Credit Suisse Group AG to push back on the $1 billion offer from UBS Group AG to take over the troubled lender.
“The reported $1 billion offer from UBS is well above the latest market valuation” for the Swiss bank, El-Erian, chief economic adviser at Allianz SE and a Bloomberg Opinion columnist, said in a tweet on Sunday. “The alternatives for dealing with CS would likely be on worse terms.”
Credit Suisse ended Friday with a market value of about 7.4 billion francs ($8 billion), though El-Erian is suggesting the market valuation of the bank is far less. The bank, meanwhile, believes the $1 billion offer is too low and would hurt shareholders and employees who have deferred stock, Bloomberg earlier reported.
Read more: Credit Suisse Paths Narrow on Low UBS Bid, Government Aid Talks
Investors dumped Credit Suisse’s stocks and bonds after the collapse of smaller US lenders over the last week. The Swiss central bank vowed to provide liquidity which briefly calmed markets, while Swiss authorities are attempting to broker a deal between Credit Suisse and UBS to address the rout.
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