In its recent decision in the matter of Repower AG (Repower) dated 13 November 2012, the Takeover Board (TOB) granted an exemption from the obligation to make an offer in accordance to article 32(2)(a) of the Stock Exchange Act (SESTA) with regard to a transfer of voting rights within a group of shareholders.

The shareholders of Repower currently include a group consisting of the Canton of Grisons (GR; 46%), Alpiq AG (Alpiq; 24.6%) and Axpo Trading AG (Axpo; 21.4%) (Repower Group). Only 8% of the Repower shares are considered to be held in free-float. Repower is listed on SIX Swiss Exchange.

In the transaction at hand, Alpiq intends to sell its entire shareholding in Repower to the remaining Repower Group. Whereas in a transitional structure GR and Axpo will remain as the sole members of the Repower Group (Transitional Structure), it is intended by the Repower Group to transfer the shares and voting rights of the former Alpiq participation to a new, strategically suitable partner in the short to medium term (Target Structure). The Repower Group intends to conclude new shareholder agreements, both for the Transitional Structure and the Target Structure. Given that GR and Axpo each already holds a substantial amount of Repower shares, the transfer of Repower shares with regard to the Transitional Structure, triggers the obligation of each Repower Group member to make an offer according to article 32 (1) and 52 (1) SESTA.

Repower filed for confirmation with the TOB, that no obligation to make an offer exists neither for the Repower Group members individually nor as a group or as an alternative, filed for an exemption from the obligation to make an offer according to article 32 (2) (a) SESTA based on the transfer of voting rights within a group of shareholders.

The TOB, however, did not join the position of Repower that no obligation to make an offer existed, but granted an exemption with regard to a transfer of voting rights within a group of shareholders. It held that the intended share purchase agreement and the shareholder agreement, which will be implemented for the Transitional Structure, will leave the relevant control of the Repower Group members unchanged. In particular, there will be no significant changes in the board of directors of Repower and the requirement for unanimity of the Repower Group on important decisions remains in force.

Whereas the TOB granted an exemption with regard to the Transitional Structure, it did not accept to consider the request for an exemption from the obligation to make an offer concerning the Target Structure. The TOB held that the relevant facts with regard to the transfer of Repower shares to the new shareholder are too ambiguous at this time.

(Reference: CapLaw-2013-6)