What’s new: Citadel Securities LLC has made a non-binding offer to pay $1.5 billion yuan to 2 billion yuan ($210 million to $280 million) for Credit Suisse’s Chinese securities venture, Bloomberg reported.
The business, Credit Suisse Securities (China) Ltd., was put up for sale by UBS Group AG after it took control of Credit Suisse when the bank collapsed last year. UBS has its own securities venture in the Chinese mainland and cannot hold two licenses according to Chinese rules.
But a deal won’t be closed very soon as Credit Suisse is still awaiting approval from Chinese regulators to buy out the unit by acquiring a 49% stake from its Chinese partner Founder Securities Co. Ltd., people familiar with the matter told Caixin. Credit Suisse collapsed last March before seeing through the agreement.
Citadel, Credit Suisse and UBS didn’t reply to Caixin’s inquiries about the matter.
The context: Investors’ interest in the unit has been subdued amid growing caution among global financial institutions about doing business in China as the world’s second largest economy is rattled by slowing growth and geopolitical risks, Bloomberg said.
Market make Citadel is the only global financial firm to bid for the business, said Bloomberg citing unidentified sources. Warburg Pincus also considered bidding, but decided against proceeding since it didn’t meet the set floor price.
At least one Chinese company has also made a bid, the report said.
Citigroup expressed an interest in April in taking over Credit Suisse Securities as a way of obtaining a securities business license in China. But the U.S. bank later changed its plan, deciding to apply for its own license for a wholly-owned business, Caixin learned.
Established in 2008, Credit Suisse Securities is the first securities joint venture approved in China. Founder Securities initially held 66.7% in the company. In 202,0 Credit Suisse increased its stake in the venture to 51% and proposed a buyout for 1.14 billion yuan ($160 million) in 2022.
Contact reporter Han Wei (weihan@caixin.com)
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