Cevian Takes $1.3 Billion Stake in UBS, Citing Potential to Increase Value -- Update

By Adria Calatayud

Activist investor Cevian Capital has taken a stake in UBS Group worth 1.2 billion euros ($1.31 billion), saying it sees significant value potential in the Swiss financial giant after its takeover of rival Credit Suisse.

The Swedish investment firm said Tuesday that its stake in UBS amounts to 1.3%. UBS declined to comment when contacted by Dow Jones Newswires.

"The board and management team are doing an excellent job integrating Credit Suisse and we have been impressed by their commitment to further improve UBS," Cevian Capital Managing Partner and cofounder Lars Forberg said. "Strengthened by the acquisition, UBS is the largest global wealth manager with unique market positions and financial strength."

The investment by Cevian comes six months after UBS formally completed its acquisition of Credit Suisse and as it faces what is likely to be a prolonged integration period.

Cevian said UBS's shares could be worth 50 Swiss francs ($57.67) each if the group's valuation gap relative to U.S. peer Morgan Stanley is closed.

UBS shares closed at CHF25.35 on Monday, giving it a market capitalization of CHF87.76 billion. On Sept. 30, UBS shares traded at 1.04 times the bank's tangible book value--a common metric of a bank's valuation--while Morgan Stanley's was 2.02 times, according to FactSet data.

Shares in UBS were up 47% since the beginning of the year through Monday's close, outperforming the 19% gain in the pan-European Stoxx Europe 600 Banks index over the same period.

At 0806 GMT, UBS shares traded 1.3% higher at CHF25.67.

UBS's stock, like those of peers, was hit hard by turmoil that began with the collapse of Silicon Valley Bank in March and led to a deal engineered by Swiss authorities for the acquisition cross-town competitor Credit Suisse, which had lost the confidence of clients and markets. UBS shares recovered to pre-SVB levels in mid-August, months ahead of many of its European peers, after it said it didn't need aid from Swiss authorities for the Credit Suisse deal.

Cevian specializes in buying substantial minority stakes in European-listed companies that it believes are undervalued. The firm says its investments tend to focus on stocks that are overlooked, misunderstood or out-of-favor with investors.

-Pierre Bertrand contributed to this article.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

December 19, 2023 03:41 ET (08:41 GMT)

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