Abstract：eToro delists Credit Suisse stock due to UBS acquisition. The platform will not support share conversion and starts liquidation process on June 8, 2023.
Online investment platform eToro has announced the removal of Credit Suisse Group AG ($CSGN.ZU) from its listing. This action comes in response to the impending acquisition of Credit Suisse by UBS Group AG ($UBS). The finalized date for this substantial move in the banking industry is slated for Monday, June 12th, 2023.
Under the terms of the agreement, UBS owners will get one UBS share for every 22.48 shares owned. Credit Suisse shares will be available for trading on eToro until the market ends on Thursday, June 8th, 2023. The stock will no longer be accessible for trading on the eToro platform after this date.
Contrary to some expectations, eToro will not be supporting the event of the acquisition. This means that users will not be receiving shares of US Bancorp ($USB) for their Credit Suisse shares. Instead, the online platform will begin the liquidation process immediately after the market closes on Thursday, June 8th. Once the liquidation process is completed, users' positions will be closed at the average liquidation price.
UBS Group AG anticipates completing its takeover of Credit Suisse Group AG as early as June 12th, a move that will create a new juggernaut in European banking. This acquisition is poised to end weeks of uncertainty for the lenders' over 100,000 employees.
Credit Suisse shares will be delisted from the Swiss SIX Stock Exchange on June 13th and the New York Stock Exchange on June 12th, after completion. This decision heralds the emergence of a banking behemoth that will more than quadruple the size of Switzerland's economy, positioning the country prominently in the global fight for managing elite money.
Originally, UBS had projected the takeover completion for the end of May or the beginning of June. However, due to ongoing negotiations regarding the precise terms of a 9-billion Swiss franc state guarantee for potential losses, there was a risk of delay.
The state guarantee was considered necessary due to the limited time available for due diligence, as well as the presence of hard-to-value assets within Credit Suisse's portfolio, which UBS plans to wind down.
In the event of incurred losses, UBS would cover the first 5 billion francs, with the government covering the subsequent 9 billion francs.
Due to the complexity of the deal, UBS may have to postpone the publication of its second-quarter results from the original date of July 25th. This will provide sufficient time from the deals closing to provide combined financial statements.
The acquisition will significantly increase UBS's workforce. Currently, UBS has 74,000 employees, but if all of Credit Suisse's staff is absorbed, the total headcount could rise to 120,000. It's worth noting that some overlap and ongoing cuts at the bank might limit the actual increase in staff.
Credit Suisse and UBS are part of eToros @TheBigBanks Smart Portfolio, which offers diversified allocation across numerous financial sectors, including banks and financial institutions. Despite the delisting of Credit Suisse, the Smart Portfolio remains available with a minimum investment of $500.
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