Category Archives: Takeover

The use and modalities of opting out/up clauses – new developments

In the case of MCH Group AG, the Swiss Takeover Board and FINMA refined their practice regarding the consent of the majority of the minority shareholders to the introduction of an opting out/up by clarifying who is considered to be a minority shareholder and which quorum is used to determine the voting result.

By Dr. Dieter Dubs / Fabienne Perlini-Frehner (Reference: CapLaw-2021-36)

Share Buy-backs – Reloaded | Insights into Selected Areas of Publicly Announced Share Buy-backs by Swiss Companies

Arbitrageurs are important players in the buy-back market, primarily because of certain tax considerations. One important driver is the repurchase price a company is permitted to offer in a share buy-back. Particular attention should be placed to secondary market transactions during a share buy-back (e.g., sales of ADRs). Novelties include VWAP-based buy-back programs and buy-backs executed via Dutch auction. 

By Hansjürg Appenzeller / Dieter Grünblatt (Reference: CapLaw-2019-17)

Untrue or Incomplete Information in Offer Prospectus

On 22 November 2017, the Swiss Takeover Board issued a ruling regarding untrue or incomplete information with respect to the offeror contained in the offer prospectus published by HNA in connection with the public tender offer for all shares in gategroup.

By Hans-Jakob Diem / Andreas Hinsen (Reference: CapLaw-2018-32)

Rising Popularity of Reverse Break Fees and Legal Challenges for Swiss Bidders

Reverse break fees are becoming more and more popular in private but also public M&A deals. Compared to Switzerland, reverse break fees are often significantly higher in the US. The Swiss Takeover Board is limiting direct break fees in public offers. Reverse break fees, however, are not subject to any ex ante official control and might, therefore, expose the board members of target companies to ex post challenges.

By Urs Kägi / Daniel Küpfer (Reference: CapLaw-2017-46)

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)