UBS AG, Zurich, Switzerland, will sell a 20.7% stake in Julius Baer Holding and use the proceeds to buy back shares, according to spokesman Serge Steiner. UBS estimates a pre-tax gain of about 2.1 billion Swiss francs ($1.7 billion), valuing the stake at about 4.1 billion Swiss francs, based on current market prices. Julius Baer shares increased 1.73% today, closing at 91.15 Swiss francs per share. UBS closed up 1.28% at 79 Swiss francs per share.
Investors welcomed UBS announcement that it will inject more cash into its ongoing share buyback plan, which was announced in March. Also, the decision to sell the stake in Julius Baer was fully expected, said Dirk Becker, a banking analyst at Kepler Equities.
UBS will begin to look for a potential buyer, Mr. Steiner said. Options would include either selling the entire stake to one buyer or dividing it among several institutional investors. UBS may even divest its stake in a capital market offering, though analysts said this option is unlikely given that UBS would no longer determine who gets the shares.
I expect a resolution is imminent, Mr. Becker added. Theres no shortage of interest; you can almost put in any name.