Ebner has probably not been helping the selling pressure on TLRK:
from DJN:
ZURICH (Dow Jones)--Swiss financier Martin Ebner Wednesday sold stakes worth CHF3 billion in his retail investment funds to a state-backed regional bank, amid talk of an acute liquidity crisis at his BZ Holding AG investment group.
The holding was bought by Zuercher Kantonalbank, or ZKB, for an undisclosed sum. Kurt Schiltknecht, a BZ board member, said the funds that BZ Holding managed have suffered from the prolonged market downturn, leading it to look for a partner with a strong distribution network.
Schiltknecht would not comment on the investment group's financial strength, though the Swiss banking regulator said BZ Bank, a small private bank that forms part of the holding being sold, is fulfilling all regulatory requirements. The regulator doesn't supervise the parent, which is owned by private investors and controlled by Ebner.
The sale of the funds will lead to a significant change in ownership at a number of big Swiss companies. Ebner now owns less than 5% of Credit Suisse Group (CSR) compared to 9.7% previously. His holding in Swiss engineering giant ABB Ltd (Z.ABB) falls to 9.7% from 10.1%, while his stake in insurer Baloise Holding AG (Z.BAL) has dropped to 10.9% from 20.1%.
Credit Suisse's share price initially fell on the news, but later recovered on the market's belief that selling pressure will now cease. In early afternoon trading, Credit Suisse was up 4.8% at CHF36.25.
BZ Group's funds have been badly hit this year due to the poor performance of some of its biggest investments, including Credit Suisse and ABB, which have halved in value this year.
ZKB said it was getting a bargain. It is buying stakes of between 17% and 20% in Ebner's four listed investment vehicles -- BK Vision AG (Z.BKV), Pharma Vision AG (Z.PHV), Spezialitaeten Vision AG (Z.SPV) and Stillhalter Vision ( Z.STV).
These four companies own shares in a wide range of other companies, including Credit Suisse and ABB, which ZKB believes are undervalued. The integration of the funds will boost the bank's assets under management by 4% to CHF73 billion, ZKB said.
"We decided on the transaction a few days ago, it was closed very rapidly," said Urs Ackermann, a spokesman for ZKB. He said the timing of the deal was favorable given the current value of the shares in the acquired portfolio.
"In a bearish stock market the downward pressure on quoted investment vehicles is even stronger than on other stocks. We had to look for a strong partner with a good distribution net," BZ Group's Schiltknecht said.
He would not comment on Swiss media reports over the weekend that claimed Ebner is running out of cash and that creditor bank's called an emergency meeting last Thursday to discuss support for his financial empire.
BZ Group and Credit Suisse, which is believed to be one of the creditor banks, declined to confirm if a meeting had taken place. ZKB and Deutsche Bank (DB) are also understood to be creditor banks.
Funds typically use the value of their equity holdings as security for bank loans. But when the value of the shares drops beyond a certain point, the creditor banks ask for cash or additional shares to bring the collateral back in line with the size of the loan.
"With that extended bear market, the strategy seems to have backfired because the value of Ebner's equity stakes fell so rapidly," said a banking analyst who asked not to be identified.
As of June 30, BZ Bank's cash reserves were CHF58 million, down from CHF84 million at then end of 2001.
Siro Barino, a spokesman for Credit Suisse, declined to comment on the bank's exposure to Ebner's group, citing Switzerland's strict banking secrecy laws.
The Swiss Banking Commission, which regulates the country's banks, said talk of a liquidity crisis at BZ Bank was unfounded.
"BZ Bank fullfills all legal requirements; they don't have a problem," said Romain Marti, the commission's deputy director.
The regulator has asked BZ Bank and other banks to provide information on how the stock market slump affects them and in particular on shifts in the portfolios of their clients. "What we hear is that everything is business as usual," he said.
Ebner made his fortune by taking large stakes in a few big Swiss companies during the long bull market of the 1990s. He is reportedly a billionaire, but his true wealth is not known.
He fought a celebrated legal battle with the predecessor bank to UBS AG (UBS) in an attempt to make it use a single share structure. While he lost the court battle, he later emerged as the moral victor as the system was eventually adopted.
Ebner was one of the first active shareholders in Switzerland, traditionally a country where investors remained passive. But over the past two years he has moved toward trying to control management of the companies he owns by getting a seat on their boards, rather than through pushing pressure on management as a partial owner of the company.
His group still holds direct stakes in companies that are part of the funds portfolio sold to ZKB, including food group Hero AG (Z.HRO), Swedish conglomerate Investor AB (S.INV), chemicals maker Lonza Group AG (Z.LZG) and biotech firm Tularik Inc. (TLRK). |
