UBS Group AG (NYSE:UBS), a multinational investment bank, has another task to complete following its agreement to take over the failing bank Credit Suisse (NYSE:CS). UBS will meet with Michael Klein and end the First Boston deal agreed upon between Credit Suisse and Klein in October 2022.
As per the terms of the deal, Klein would end up having a major say in the functioning of CS’ investment bank. UBS will have to negotiate a favorable breakup fee owed to Klein in the event of contract termination.
Credit Suisse has had its fair share of trouble in the past couple of months, both related to its business and umpteen controversies. In one effort, CS made a pact with Klein, one of its old board members, to merge his boutique advisory firm with CS’ advisory and capital markets unit. The two units were to spin off and pursue a listing under the First Boston name. In exchange, Klein was to advise CS’ on restructuring its investment bank.
No doubt, UBS has a challenging task ahead with its takeover of Credit Suisse. UBS has to streamline operations at CS, merge complementary parts, and let go of redundant operations and staff at the failed bank. CS’ investment bank does intrigue UBS, and it wants to retain those parts, which management thinks can add substantial business and value to UBS.
What is the UBS Stock Prediction?
Since announcing the deal to buy out Credit Suisse, UBS stock has gained 11.9%. There may be a few hiccups along the way, but the outcome of the takeover will likely benefit UBS.
Further, Wall Street analysts remain bullish about UBS’s stock trajectory after the announcement. On TipRanks, UBS has a Strong Buy consensus rating based on seven Buys and one Hold rating. Also, the average UBS Group AG stock prediction of $26.38 implies 25.3% upside potential from current levels.
