Breakup proposal for UBS by Luqman Arnold, Former UBS President (Bloomberg)  (04-04-2008)

April 4 (Bloomberg) -- Former UBS AG President Luqman Arnold is proposing a breakup of the biggest Swiss bank after about $38 billion of writedowns on debt securities erased more than half its market value in the past 12 months.

Arnold, whose company, Olivant Advisers Ltd., holds 0.7 percent of Zurich-based UBS, laid out his proposals in a letter to board member Sergio Marchionne released today, and asked to meet before the annual meeting on April 23. UBS reported a 12 billion-franc ($11.9 billion) first-quarter loss on April 1 and said Chairman Marcel Ospel will leave.

UBS gained as much as 4.6 percent in Swiss trading after Arnold said the bank should consider selling its asset management unit to raise capital because a planned 15 billion-Swiss franc rights offer ``may not be sufficient.''

He said that wealth management and business banking should be placed in a Swiss holding company and be separated from the investment bank, and urged UBS not to name Peter Kurer, the bank's top lawyer, as chairman, asking Marchionne to head the board while the company looks for a banking expert to succeed Ospel.

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 Source: Bloomberg