Category Archives: Takeover

Kuoni and EFG International: Recent Decisions of the Swiss Takeover Board

This article summarises two decisions of the Swiss Takeover Board regarding the recently announced takeover offer for Kuoni by EQT, which, inter alia, contain relevant guidance in relation to the so-called “Minimum and Best Price Rules” and “irrevocables”. In addition, during the first quarter of 2016 the Swiss Takeover Board has passed a noteworthy decision in relation to EFG International concerning the non-existence of a tender offer duty in connection with the entry into a shareholders agreement.

By Philippe Weber / Thomas Brönnimann (Reference: CapLaw-2016-20)

No Tailoring of Opting Out Clauses – Takeover Board rejects Schindler’s Proposed Changes to its Articles of Association

In its recent decision 610/01 in the matter of Schindler Holding Ltd (published on 21 July 2015), the Swiss Takeover Board held that Swiss takeover law does not allow companies to provide for individual rules on the obligation to make a takeover offer that go beyond the options set forth in the law. Accordingly, in the eyes of the TOB, a new provision in the articles of association of Schindler which indirectly provides for an obligation to make a takeover offer for anyone who acquires more than 50% of the voting rights in Schindler, combined with Schindler’s existing opting out clause, would not have any legal effect.

By Pascal Hubli / Nadin Schwibs (Reference: CapLaw-2015-44)

Electronic Means of Communication in Future Takeover Proceedings – Thoughts on the New Rules Proposed by the TOB on 18 August 2015

In August/September 2015, the Swiss Takeover Board (TOB) conducted a consultation proceeding on a proposed revision of the Takeover Ordinance (TOO). At its core, the revision aims at abolishing the duty to publish the offer documents in newspapers. The authors support the proposed revision for efficiency reasons. For policy reasons, the authors further advocate the issuance of an official list of media-addressees (including email-addresses) by the TOB and a change of the current practice of the TOB according to which the offeror bears all the risks in case of (partial) failure of the electronic publication. Rather, the offeror shall be responsible only for publishing the offer documents on its website and for delivering them to the media-addressees as per the list of media-addressees and to the TOB.

By Severin Roelli / Christian Leuenberger (Reference: CapLaw-2015-45)

How to Buy a Big Block of Shares in an Ongoing Buyback Program?

In a recent decision in the matter of Schindler Holding Ltd (published on 18 October 2013), the Swiss Takeover Board approved the repurchase by Schindler of a significant block of own shares from a single shareholder during its ongoing buyback program requiring Schindler to change its buyback program at market price into a ten-day buyback offer at fixed price addressed to all the holders of shares and participation certificates. The ongoing buyback program at market price had to be suspended for the duration of the fixed-price offer and was resumed thereafter.

By Lorenzo Olgiati/Pascal Hubli (Reference: CapLaw-2014-7)

New Regulatory Framework for Share Buy-backs

In a far-reaching revision of the Stock Exchange Act (SESTA), which entered into force on 1 May 2013, the prohibitions of insider trading and market manipulation were moved from the Penal Code (PC) into the SESTA. As the scope of the prohibitions is very broad, the Stock Exchange Ordinance (SESTO) has been amended to include certain safe harbor exemptions, in particular concerning share buy-back programs. By and large, these safe harbor rules mirror some of the rules developed by the Takeover Board (TOB) for share buy-backs and set out in former versions of TOB Circular No. 1. As the TOB consequently amended Circular No. 1 with the goal of eliminating duplications, the regulatory framework of buy-backs is now spread across TOB Circular No. 1, articles 33e–33f SESTA, articles 55b–55d SESTO, as well as the related FINMA Circular 2013/08 on Market Conduct Rules, and enforced by different authorities. Changes in substance include the publication and confirmation requirements or the elimination of the “safe harbour” exemption for public buy-back programs relating to less than 2% of the shares.

By Dieter Gericke / Vanessa Isler (Reference: CapLaw-2013-28)

The Takeover Board Applies its Practice with Respect to Reorganization Exemptions to Unfriendly Set Ups and, de facto, Rules Out Exemptions from the Offer Duty for Unsolicited Reorganizations

In a recent order the Takeover Board had to rule on whether to grant an unsolicited restructurer a reorganization exemption from the statutory duty to make a purchase offer for all shares of a listed company. The decision is of particular interest because the request for the reorganization exemption was not supported by the board of directors of the potential target company. In the case at hand, the Takeover Board denied the grant of a reorganization exemption applying, amongst others, the principle of subsidiarity which precludes the grant of an exemption as long as the company is in search for an anchor investor and is implementing measures to enhance its financial situation.

By Severin Roelli (Reference: CapLaw-2013-16)

New Rules on Offer Consideration in Voluntary Exchange Offers

On 1 May 2013, a new set of rules governing the obligation of the bidder to offer an all cash alternative in voluntary exchange offers has come into force. The most significant change pertains to the introduction of an obligation to offer a cash alternative if the bidder purchases target shares for cash during the twelve months preceding the announcement of the exchange offer.

The Repurchase of Own Shares Outside a Parallel Buyback Offer: The Decision of the Takeover Board in re Absolute Invest

The Repurchase of Own Shares Outside a Parallel Buyback Offer: The Decision of the Takeover Board in re Absolute Invest

The Takeover Board is enforcing compliance of buyback programmes exempted via reporting procedure more strictly. It has used a large buyback of an investment company outside a repurchase programme to remind issuers that the fundamental principles of takeover law apply to buyback programmes as well – with some surprising twists and consequences.

Takeover Board Opts-in Again Into the Opting-Out and Revives the Selective Opting-Out

Opting-out has been the most discussed topic in Swiss takeover law since its entry into force in 1998. At the core of the debate has been the question as to who should regulate the right to opt-out from the mandatory offer obligation—the civil courts, the Takeover Board or both? On 11 October 2012, the Takeover Board (TOB) issued a decision in the matter Advanced Digital Broadcast Holdings SA (decision 0518/01), whereby the TOB stated that (i) it would review itself whether the introduction of the opting-out prejudices the rights of minority shareholders by examining the votes of these minority shareholders at the general meeting introducing such opting-out (departing from the LEM Holding SA decision of 22 September 2011) and that (ii) an opting-out could also only apply to a specific transaction/shareholder, thereby allowing the introduction of the so-called selective opting-out (confirming its ESEC Holding AG recommendation of 6 June 2000, but departing from the decision of the Federal Banking Commission of 23 June 2000 in the same matter). No recourse has been filed against the decision of the TOB; it is therefore final.

Swiss Takeover Board Proposes New Rules on Offer Consideration in Qualified Voluntary Exchange Offers

On 4 May 2012, the Swiss Takeover Board has proposed a new set of rules governing the obligation of the bidder to offer an all cash alternative in qualified voluntary exchange offers. The most significant change pertains to the extension of the already restrictive rules to the twelve-month period prior to the announcement of the exchange offer. It is uncertain when and to what extent the proposed rules will become effective.