© Reuters.
By Scott Kanowsky
Investing.com — UBS Group AG (SIX:) will enter talks to undo a deal that would have seen Wall Street trader Michael Klein take control of much of the investment banking division of swiss credit Group AG (SIX:), the Financial Times reported on Wednesday, citing people familiar with the matter.
According to the newspaper, UBS executives believe that the terms offered by Credit Suisse to Klein were too generous.
The merger, which was agreed to last October, would have brought together Klein’s boutique consultancy with Credit Suisse’s capital markets and advisory division. That business would then have been spun off and traded under the revived name of First Boston, in which Klein would have held a minority stake.
People close to UBS told the FT that UBS, which was forced by Swiss regulators to buy Credit Suisse for $3.25 billion, has assigned a legal team to find a potential path to void the Klein deal in the cheapest way. possible. In particular, UBS is looking to remove or reduce the fee that was owed to Klein in the event the deal collapsed.
A person close to Klein and quoted by the FT as saying that, with Credit Suisse’s operations about to be incorporated into its biggest rival, UBS, they “seriously doubt” that the First Boston deal could go ahead as originally planned.