Credit Suisse Group AG (ADR) (NYSE:CS), the second largest bank in Switzerland is planning to sell its 7% stake or as much as 80.4 million shares in Aberdeen Asset Management plc (LON:ADN), the largest money manager in Scotland to raise $321 million additional capital.
According to Bloomberg, two people who have knowledge about the transaction revealed that Credit Suisse plans to sell its Aberdeen stock for 245 pence to 255 pence per share. The two sources asked not to disclose their identities because the transaction remains private.
Based on the annual financial report released by the Swiss Central Bank Credit Suisse needs to substantially add capital this year. The company is selling part of its interest in Aberdeen because the bank is experiencing difficulty in gaining capital due to pressure on earnings brought by weaker client activity. Credit Suisse is raising its capital in anticipation for the upcoming implementation of stricter regulatory requirements.
According to Bloomberg data, Aberdeen Asset Management gained 25 percent this year compared with the 1 percent increase in the U.K. benchmark FTSE 100 Index. This is the primary reason the Swiss bank is reducing its stake in Aberdeen by 7%.
A term sheet obtained by Bloomberg also revealed that Credit Suisse would still hold 13 % stake in Aberdeen if the sale will push through.
Last month, Fox Business reported that Credit Suisse issued a forecast that the company would experience a profitable second quarter although its shares dropped to a 20 year low. There were also speculations that the Swiss bank is planning to exchange its two bonds with a face value of 6 billion Swiss Francs or $6.2 billion in the form of equity by the end of 2013. Credit Suisse did not release any comment on the rumored plan.