UBS AG, the world’s biggest money manager, plans to sell its 4.1 billion-Swiss franc ($3.3 billion) stake in Julius Baer Holding AG and use the proceeds to buy back stock, Bloomberg reports.
UBS got the 20.7 percent holding when it sold three private banks and an asset management unit to Julius Baer in December 2005. The sale will generate a pretax gain of about 2.1 billion francs, Zurich-based UBS said in a statement today.
The largest Swiss bank will repurchase shares, which have trailed rivals Credit Suisse Group and Deutsche Bank AG for the past year as the company posted three straight declines in quarterly earnings. Julius Baer’s stock climbed 34 percent this year amid speculation among analysts that the Zurich-based company may be a takeover candidate.
“UBS is clearly trying to win friends after three quarters of disappointing quarterly results,” Peter Thorne, an analyst at Helvea in London who rates Baer shares “neutral,” said in a note to investors today. “We expect UBS to sell its shares to the likes of Julius Baer itself or institutional shareholders.”
Shares of Julius Baer, Switzerland’s biggest publicly-traded private bank, rose 15 centimes to 89.75 francs by 12:54 p.m. Swiss time today. The stock reached a record 94 francs last week. UBS shares fell 5 centimes to 77.95 francs. They have gained 12 percent in the past year, compared with Credit Suisse’s 30 percent increase and Deutsche Bank’s 24 percent advance.