EFG shares rise sharply after media reports on talks with JB
Published: Monday, May 27th 2024, 10:30
Updated At: Tuesday, May 28th 2024, 01:59
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Shares in EFG International rose significantly at the start of the week. The background to this is likely to be media reports on Friday evening that the private bank Julius Baer has held talks with its competitor with a view to a merger.
At 9.45 a.m., the shares climb 4.7 percent to CHF 12.82 in an overall market that is little changed. Volumes are very high: at around 160,000 shares, well over half of the average daily volume is already traded. Julius Baer (-0.9%), on the other hand, is one of the biggest losers among the blue chips.
Julius Baer is said to have its eye on EFG International, according to news agencies. The bank had held preliminary talks with EFG in recent weeks about the possibility of a merger, wrote the Bloomberg news agency on Friday evening. According to Reuters, however, these talks have been broken off.
"Strong industrial logic"
The speculation is being greeted with interest on the market. There is a strong industrial logic for a merger, says ZKB in a commentary. The combined assets under management are likely to reach around CHF 600 billion, which would make the two banks clearly one of the top three Swiss private banks (after UBS and Pictet). On the cost side, substantial reductions should be possible, particularly in the back office. However, the cultures (e.g. remuneration systems) of the two banks are very different, which would not make a merger easy.
The analysts at ZKB do not see a merger in the short term. In the medium term, however, a merger remains possible, which may also explain the constant reports and rumors in the press, they say. ZKB sees more attractive M&A scenarios: Smaller acquisitions in particular are likely to be a priority for both private banks, which could largely cushion any pressure on margins.
EFG will report on its business performance in the first four months of 2024 on Tuesday (tomorrow). However, it is not expected that the speculation surrounding a merger will be commented on extensively. In any case, neither bank was willing to comment on Friday evening when the speculation emerged.
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