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Julius Baer could sell U.S. entity; Sale by UBS of its 20.7% holding in private bank might put unit in play.

Publication: Pensions & Investments
Publication Date: 28-MAY-07 		Format: Online
Delivery: Immediate Online Access
Full Article Title: Julius Baer could sell U.S. entity; Sale by UBS of its 20.7% holding in private bank might put unit in play.(UBS AG and Julius Baer Investment Management Inc.)

Article Excerpt
Byline: Thao Hua

Julius Baer Investment Management LLC, New York, could end up for sale if UBS AG sells its 20.7% stake back to parent Julius Baer Holding AG.

Officials of Zurich-based Julius Baer Holding might consider selling the U.S. asset management arm to finance the purchase of UBS' shareholding, according to banking analysts and asset managers who asked not to be named.

UBS announced May 25 that it is selling its 20.7% stake, worth about 4.2 billion Swiss francs ($3.4 billion); on Friday, Baer stock closed at 91.15 francs per share. The shareholding was valued around 2 billion francs when UBS acquired it in December 2005 and agreed to a lock-up period that ended Friday.

"We'll sell the stake,'' said Serge Steiner, deputy head of UBS media relations. "The options are wide open. We would consider disposing of the whole stake to one buyer, or in a capital market offering.''

For the Julius Baer group, one of the main concerns is that another buyer could use the 20.7% stake as a stepping stone to a takeover of the bank itself, analysts said. So it is essential that the group buys back a significant portion, at least, of UBS' stake.

However, Julius Baer is unlikely to be able...

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