UBS opened negotiations to suspend the transfer of assets from investment bank from Credit Suisse to banker Michael Klein (nothing to do with the Via Varejo shareholder).
The news is from Financial Times.
“The deal was done when the bank had a gun pointed at its head,” a person close to UBS told the FT. “We are not here to enrich Michael Klein at the expense of our shareholders.”
In the midst of CS restructuring, Klein – a protégé of the legendary Sandy Weill, who was even considered for the command of Citi – had closed an agreement with the executives of the Swiss bank in October. But now, UBS is having second thoughts.
Klein, who was previously on the CS board, negotiated the merger of his M&A boutique with Credit Suisse’s investment banking business. The idea was to make a spinoff of that business and listing it on the Stock Exchange, rescuing the First Boston brand, which made Wall Street history in the 1990s. Klein would be a minority shareholder, while CS would maintain control.
To make the deal viable, CS agreed to pay US$ 175 million for M. Klein & Company – a transaction concluded in February, weeks before the purchase by UBS. Klein also took US$ 10 million (in physics) to advise on the restructuring of the investment bank.
Now, UBS wants to give up the spinoff and is willing to break the contract with Klein – paying the lowest break-up fee possible.
According to the FT, the idea of relaunching First Boston will be abandoned because UBS sees parts of CS’s IB business as “complementary” to its own – particularly the US teams and in the technology sectors, where the bank has historically built a large franchise. .
“We know that tech entrepreneurs are the wealth creators of the future,” UBS CEO Ralph Hamers said on a conference call with analysts on Sunday, according to the FT. According to the newspaper, the CEO also wants to retain bankers specialized in pharmaceuticals, media and telecom, sectors that UBS believes can generate good clients for its private bank.
Giuliano Guandalini and Geraldo Samor
