A top-10 UBS shareholder is urging the bank to leave Switzerland, days after Semafor broke the news that the company was mulling doing just that. Artisan Partners said it is worried that the bank won’t be able to compete with US rivals if it has to raise new capital, as a law advancing in the Swiss parliament would require.
“There is no compelling reason for UBS to remain a Swiss company,” Artisan wrote Wednesday. “Indeed, there are about 36 billion reasons for UBS to leave,” referring to the market capitalization it calculates the bank would lose by swallowing the capital raise. Artisan has turned activist on companies before, pressuring Danone’s CEO out and lending its support to Elliott at Southwest Airlines.
At UBS, it’s pushing on an open door: The bank has compared the Swiss law to “two black eyes and a broken nose,” but said Thursday its goal is to “continue operating successfully as a global bank from Switzerland.” Just behind Artisan on UBS’ shareholder registry is activist fund Cevian, which a year ago supported the idea of UBS redomiciling elsewhere.
UBS’ easiest way out is a merger, and Swiss newspaper Blick reported this weekend that as many as eight banks have expressed interest. Reuters Breakingviews has a good breakdown of how an exit might work.