UBS completes French push
SWITZERLAND - Swiss bank UBS has received reguatory approval to purchase the French asset manager Caisse Centrale de Réescompte (CCR) from Germany's Commerzbank, amid preparations for its extraordinary general meeting (EGM).
Following "provisional adjustments made during the closing process", the CCR purchase price is down to €387m down from €435m announced last October (See earlier IPE story: UBS expands in France).
"Last October, we made it clear that the final purchase price will depend on the performance of CCR's invested assets during the closing phase," a spokeswoman for UBS explained to IPE.
She added turbulence on the stock markets was one reason for the firm's knock in performance, and this, in turn, led to a reduction in the purchase price.
CCR saw its assets under management drop from €18.6bn to €13.3bn over the last year.
UBS will pay €247m for a 100% interest in the CCR Group as well as €140m for the group's excess capital.
"Under the terms of the transaction, the final price for the acquisition will be determined post closing, following determination of the actual adjustments," the bank noted in a statement.
Meanwhile, UBS has sent out an invitation to its shareholders, concerning the EGM on February 27, in which it recommends shareholder vote against both Swiss asset manager Ethos' call for an external audit into losses made during the US subprime crisis and against Pensionskassen Profond's call for a change in the capital increase strategy.
In the invitation, the bank announced it will answer all questions posed by Ethos regarding the losses attributable to shareholders - which have recently been reported with CHF4.4bn (€2.7bn) - during the EGM and continue internal audits into the issue. (See earlier IPE story: UBS under pressure over subprime losses)
"It is therefore unnecessary to get a court to appoint an external auditor [as suggested by Ethos]", UBS noted.
The bank has also recommended shareholders vote against Profond's proposal to increase UBS' capital via a rights issue, instead of offering mandatory convertible notes (MCN) to two large Asian institutional invstors. (See earlier IPE story: "Strong investor" could help small UBS shareholders - Profond)
UBS explained a rights issue would not guarantee a capital increase by a certain fixed amount while costing more and being more time consuming than issuing MCN.
"The announcement of a rights offering of this size would cause downward pressure on our share price, and thus would increase the uncertainty both as to the success of and the proceeds expected from a rights offering," UBS explained.
In its own recommendation to shareholders, Ethos urged support for ts own proposal for a special audit as well as Profond's proposal for a capital increase respecting the pre-emptive rights of existing shareholders.
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