Credit Suisse’s retail investors are gearing up to sue UBS Group AG (NYSE:UBS) over its takeover of the beleaguered financial institution. According to the Financial Times, various individual investors are preparing to file a claim against UBS in Zurich’s commercial court today. It seems to be a never-ending legal drama for Swiss-based UBS after it announced an emergency deal to acquire Credit Suisse to avoid bankruptcy in March 2023.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Last week, the UBS group officially canceled the Swiss government’s protection of $10.3 billion related to the takeover deal. Post-announcement, the shares traded up by over 5% on Friday. YTD, the shares have gained 26.4% after a roller coaster ride in trading.
The New Lawsuit
The recent legal action mainly involves former Credit Suisse employees who acquired the shares as part of their compensation. While the majority of individuals submitting the claim are Swiss, there are also investors from various other countries, including the U.K., U.S., Germany, Austria, Thailand, and Dubai. The Swiss Investor Protection Association (SASV) will be acting as the representative for these approximately 500 investors.
Due to the Swiss authorities’ decision to withhold voting rights from shareholders in both banks regarding the agreement, these investors experienced substantial losses when the bank was rescued. This represents the second occurrence of Credit Suisse shareholders commencing a class action against UBS, with numerous legal proceedings also being pursued by bondholders who incurred losses.
Arik Röschke, the general secretary of the SASV, speculates that the bank could potentially contemplate resolving the matter through an out-of-court settlement to avoid incurring further expenses. He commented that “if the judge found in the claimants’ favor, UBS could be required to pay all shareholders, though if the bank settled out of court, only the claimants would be reimbursed.”
What is the Future Price of UBS Stock?
Last week, the stock received mixed views from two analysts. Three days ago, Kepler Capital analyst Nicolas Payen confirmed his Hold rating on the stock. However, he predicts a downside of 7% in the share price.
On the contrary, Kian Abouhossein from J.P.Morgan reiterated his Buy rating on the stock five days ago. He is bullish on the stock and has forecasted a growth rate of 32% in the share price.
Overall, UBS stock has received a Moderate Buy rating on TipRanks based on a total of 12 recommendations from analysts. It includes seven Buy, four Hold, and one sell ratings. The average price prediction is $26.31, which implies an upside potential of 12.6% from the current level.
