Feb 7 (Reuters) – Apollo Global Management Inc (APO.N) is among a group of financial firms considering investing in Credit Suisse’s (CSGN.S) revamped investment bank CS First Boston, a source with knowledge of the matter told Reuters.
U.S. asset manager and private equity firm Apollo has been contacted by the Swiss bank about investing in CS First Boston (CSFB) but has yet to make a decision, the source added.
The Wall Street Journal reported on Tuesday, citing people familiar with the matter, that Apollo is in talks to take a stake in the unit, while the discussions could still fall apart.
Credit Suisse is undergoing a sweeping overhaul to restore profitability after a string of losses. It will now focus on managing money for the wealthy and create CSFB to run its investment banking activities.
The Zurich-based bank has said it is seeking $500 million from investors for CSFB, which it is marketing to investors as a “super boutique” and sees revenue eventually more than doubling to as much as $3.5 billion, Reuters reported on Monday.
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Credit Suisse is looking to raise the funds through a five-year exchangeable debt security, paying 6% annual interest, and offering a 10% discount on CSFB shares in the event of a public offering, the company document seen by Reuters shows.
In its pitch, the bank also laid out in greater detail its reasoning for the restructured division’s competitive edge in a crowded investment banking market. CSFB, the presentation said, would be more focused than large banks but broader than advisory firms that do not offer services such as financing.
Apollo has already committed to buying the bulk of Credit Suisse’s securitized products group, which will be outside CSFB.
Credit Suisse, which reports fourth-quarter earnings on Feb. 9, said in November that it expects to complete the transaction by mid-2023.
Reporting by Greg Roumeteliotis and Shivani Tanna; Editing by Sohini Goswami, Savio D’Souza and Alexander Smith