UBS shares rise on HSBC merger talks
HSBC is reportedly considering bidding for embattled Swiss bank UBS' operations in America, sending UBS' shares shooting over 4%.
The rumour mill is churning that the global investment bank may seek to buy UBS' US-based business. This mainly consists of Paine Webber, the US broker and asset manager acquired by the Swiss bank in 2000 for $620m (€422m).
UBS' share price jumped 4.56% to SFr21.00 at 13.58 GMT off the back of the rumours, outperforming a 1.08% rise in the DJ Stoxx European banks index .
This is not the first time speculation over a tie-up between the banks has done the rounds. In June this year online daily Dealmaker reported HSBC was mulling an $80bn bid for its Swiss rival.
Last week the bank's share price was influenced by rumours of a possible merger with Swiss rival Credit Suisse, and shares ended 1.5% up.
UBS said in its most recent quarterly report it had no intention of putting any of its businesses up for sale, however since then the bank has suffered sharp drops of its share price related to over exposure to risky sub-prime credit.
But UBS’ trump card still is its wealth management business that should ensure it manages to avoid drastic measures to restore confidence, say analysts.
“The valuation of the wealth management business alone is probably close to SFr40 a share, and you get a good asset manager and a dodgy investment bank thrown in for free,” said one London-based analyst.
HSBC and UBS declined to comment.
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