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UPDATE 1-Vontobel to buy back 12.5 pct stake held by Raiffeisen
June 20, 2014 / 7:57 AM / 3 years ago

UPDATE 1-Vontobel to buy back 12.5 pct stake held by Raiffeisen

(Adds detail, Raiffeisen comment, share reaction)

ZURICH, June 20 (Reuters) - Swiss bank Vontobel Holding AG said on Friday it would buy back 12.5 percent of its shares currently held by Swiss retail bank Raiffeisen, after Raiffeisen said it would end their long-standing cooperation agreement.

Under the agreement, which runs to the middle of 2017, Vontobel provides back-office functions to Raiffeisen and Raiffeisen sells Vontobel’s structured financial products.

Vontobel said it had the right to repurchase the shares as part of the agreement and that the price paid would be based on the average share price over the last 60 days, which it had yet to calculate. Based on Thursday’s closing price, the stake is worth around 250 million Swiss francs ($280.4 million).

A spokesman for Raiffeisen said the Vontobel purchase was not a surprise as it was part of the agreement.

The agreement dates back to 2004 but there were signs of strain in November 2012 over whether Notenstein Privatbank, which Raiffeisen bought in January 2012, should be included in the cooperation agreement.

Shares in Vontobel were up 1.5 percent at 31.50 francs by 0737 GMT.

$1 = 0.8917 Swiss Francs Reporting by Joshua Franklin, Ruppert Pretterklieber and Albert Schmieder; Editing by Maria Sheahan and Jane Merriman

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