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UBS set to enter talks with Michael Klein to end First Boston deal – FT



© Reuters.

By Scott Kanowsky — UBS Group AG (SIX:) will enter into negotiations to unwind a deal that would have seen Wall Street dealmaker Michael Klein take control over much of the investment banking division of Credit Suisse Group AG (SIX:), the Financial Times reported on Wednesday, citing people familiar with the matter.

According to the newspaper, executives at UBS believe that the terms offered by Credit Suisse to Klein were too generous.

The merger, which was agreed on last October, would have brought together Klein’s boutique advisory firm with the advisory and capital markets division of Credit Suisse. That business would have then been spun off and listed under the revived First Boston name, in which Klein would have held a minority stake.

People close to UBS told the FT that UBS, which was forced by Swiss regulators to buy Credit Suisse for $3.25 billion, has assigned a legal team to find a potential path to voiding the agreement with Klein in the cheapest way possible. In particular, UBS is looking to either scrap or shrink the fee that was owed to Klein should the deal collapse.

A person close to Klein and quoted by the FT said that, with Credit Suisse operations set to be folded into its larger rival UBS, they “seriously doubt” that the First Boston agreement can go forward as initially planned.


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