SWITZERLAND Law and Practice Contributed by: Nicolas Wehrli and Melanie Wilhelm, Loyens & Loeff
lication in the Swiss Official Gazette of Commerce. Mere intentions or proposals do not trigger disclosure unless legally binding. When triggered, the beneficial owner must be dis- closed. If parties act in concert, the total holding, identities, nature of co-ordination, and group repre- sentative must be reported. However, the acquirer’s strategic intent or plans for the company need not be disclosed. If a party publicly signals interest in a tender offer with- out a legal obligation to proceed, the Swiss Takeover Board may require the party to either launch the offer within a set deadline (“put up”) or publicly commit to abstain from making an offer or acquiring further shares above the mandatory offer threshold (see 4.2 Mandatory Offer ) for six months (“shut up”). 4.2 Mandatory Offer Under Swiss public takeover laws, a mandatory offer must be submitted once a direct or indirect sharehold- ing of 33⅓% is reached. This obligation also arises when the threshold is reached by acting in concert. 4.3 Transaction Structures A public company in Switzerland can be acquired through a public tender offer, a statutory merger, a share deal acquiring a controlling shareholding, or an asset deal acquiring the assets and liabilities of the operational business. Generally, the two typical transaction structures are public tender offers and statutory mergers. The public tender offer structure is usually seen in an international setting (when a (reverse) triangular merger does not work) involving a listed Swiss entity, while statutory mergers are more frequently used in domestic private M&A transac- tions. Public tender offers are governed by the Swiss Financial Market Infrastructure Act and the relevant ordinances. Statutory mergers are governed by the Swiss Merger Act. 4.4 Consideration and Minimum Price In voluntary offers, the acquisition may be structured as a cash or stock-for-stock transaction or a combi- nation thereof. In public tender offers, it is mandatory to offer a cash consideration where a stock-for-stock exchange offer is made.
In mergers, a cash compensation is possible and common, as a combination of shares and cash (where the cash compensation must not exceed 1/10 of the fair market value of the shares), as a right to choose between shares or cash compensation, or by stating in the merger agreement that only a cash compensa- tion is offered. The price offered in a public tender offer has to comply with a strict minimum price rule. The price must be equal to or higher than: • the stock exchange price, which corresponds to the volume weighted average price (VWAP) dur- ing the 60 trading days before the preliminary announcement or the offer prospectus; or • the highest price paid by the bidder (or any person acting in concert with the bidder) during the 12 months before the preliminary announcement or the offer prospectus, considering all agreements concluded during that period, regardless of the transaction’s closing. Contingent value rights are not a common feature in public M&A transactions in Switzerland. 4.5 Common Conditions for a Takeover Offer/ Tender Offer Offer conditions are permitted for voluntary offers if: • the bidder has a justified interest; • the satisfaction of a condition cannot be (substan- tially) influenced by the bidder; and • the bidder has to pay a compensation due to the type of the condition, in which case it has to imple- ment all reasonable measures to ensure that the condition is satisfied. Swiss public M&A transactions commonly involve conditions to: • secure the acquisition of control (minimum accept- ance levels); • protect the substance of the target company, including material adverse change clauses; and • secure the completion of the transaction, such as approvals by authorities, amendments to articles
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