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BLOOMBERG
Michael Klein, the CEO-designate of Credit Suisse Group AG’s investment-banking spin off, may struggle to realise his dream of building a new CS First Boston as the Swiss lender nears a forced sale to UBS Group AG.
UBS is showing little appetite for Credit Suisse’s investment banking business as part of a government-brokered takeover, putting plans to legally and operationally separate and eventually list that business in doubt.
Klein and others had already been talking to interested parties as they sought to line up investors for the business. The last few days may force the acceleration of those efforts in an attempt to save the carve-out effort, according to people familiar with the matter.
Credit Suisse said last year it has a $500 million commitment from a potential backer in CS First Boston, but has never named the investor.
The riskier investment-banking and trading operations have become a sticking point in the UBS takeover talks, Bloomberg reported earlier. In one scenario, UBS could seek to divest or unwind part of the investment banking operations, according to people familiar.
The efforts to separate the business that would become CS First Boston were still in early progress as a renewed crisis of confidence struck Credit Suisse. The spinoff has been a centerpiece of the troubled Swiss lender’s restructuring efforts and an attempt to protect and grow its best-performing investment banking businesses, such as advising on mergers and acquisitions.
Chief Executive Officer Ulrich Koerner said that the firm was looking at a potential initial public offering for the business in 2025 and that it had several parties that were interested in becoming investors.
Credit Suisse last year tapped board member and longtime dealmaker Klein to lead CS First Boston, and he stands to miss out on a large payday if the deal fails. He stepped down from the supervisory board, and recently sold his boutique investment firm to the bank in a $210 million deal which is yet to close.