After UBS offered to take over Credit Suisse for 25 centimes per share, the troubled bank's largest shareholder is pushing back on the deal.

On Sunday a story emerged in the «Financial Times» (behind paywall) that UBS made an offer to take over rival Credit Suisse for 25 centimes per share, a fraction of its 1.86 francs closing price on Friday.

Now, its largest shareholder says the offer is too low, according to a report from «Bloomberg» (behind paywall) on Sunday.

Declaration of Invalidity

The Saudi National Bank (SNB), which owns just under ten percent of Credit Suisse says the offering price is too low for both stockholders and employees, and Credit Suisse is resisting the offer, according to «Bloomberg».

Also as part of the deal, UBS is said to be insisting on a declaration of invalidity of the deal if its credit default spreads increase by 100 basis points or more from their current levels.

No Further Cash Infusion

The Saudi National Bank acquired a 9.9 percent stake in Credit Suisse last year as part of a capital increase in what it described as an «opportunistic» investment of 1.5 billion francs ($1.6 billion) at the time. 

The major shareholder confirmed last Wednesday at a conference that it would not inject any more capital. Regulatory and statutory limits would have to be overcome for it to increase its stake.

While the comments didn't diverge from those the chairman of the Saudi National Bank made last year, they triggered a selloff in Credit Suisse shares last week, as finews.com reported. 

Complex Talks

Nevertheless, the statement was punished on the stock market and led to massive selling pressure, from which Credit Suisse only briefly recovered, despite a 50 billion franc liquidity boost from the Swiss National Bank.

In the complex talks over the first merger of two global systemically important banks since the financial crisis, US and British authorities have joined the Swiss, with the Fed and Bank of England supporting the takeover, according to media reports.

Clients Withdrawing Funds

Time is of the essence to find a solution. In recent days, Credit Suisse suffered from yet more clients withdrawing funds and counterparties backing out of some deals with Credit Suisse.