SWITZERLAND Law and Practice Contributed by: Frank Gerhard, Andreas Müller and Timo Hasler, Homburger
If a bidder is prepared to launch a hostile offer, which rarely happens, it may purchase shares or call options over the stock exchange, have bank structure options and other derivatives, or purchase existing blocks from large shareholders. However, the disclosure obli - gations are designed to prevent “sneak attacks” on a company: a bidder and any parties acting in concert have to disclose their aggregate purchase positions (regardless of the type of security purchased) within four trading days from reaching or crossing certain thresholds (see 4.2 Material Shareholding Disclosure Threshold ), which leaves a bidder little time to build a meaningful stake other than through block purchases. 4.2 Material Shareholding Disclosure Threshold General Obligation to Disclose Significant Shareholdings Whoever directly or indirectly, alone or acting in con - cert with other parties, acquires or sells securities in a Swiss company listed in Switzerland (or a foreign company with a primary listing in Switzerland) has to notify the Disclosure Office of the SIX within four trad - ing days after having reached or crossed the thresh - olds of 3%, 5%, 10%, 15%, 20%, 25%, 33⅓%, 50% or 66⅔% of voting rights (whether exercised or not). The disclosure obligation relates to shares and deriva - tives of any kind (whether cash or stock settled). The triggering event is the entering into the transaction, not the closing. The reporting must be made separately for shares, purchase positions (long call or short put positions of any sort, including financial instruments that are economically equivalent to an acquisition of shares) and sale positions (short call or long put positions of any sort). Both the intentional and negligent breach of disclosure obligations are subject to fines. FINMA may also temporarily suspend the voting rights and enjoin an investor from acquiring additional securities if it has sufficient evidence of a potential breach. Special Disclosure Obligations During a Public Tender Offer From the announcement of a public tender offer until the end of the acceptance period, certain disclosure requirements apply to the bidder, all other parties to the TOB proceedings and anyone else who – directly,
indirectly or acting in concert with third parties – holds at least 3% of the voting rights in the target (or, as the case may be, in another company whose shares are offered in exchange for the target shares). These persons must report to the TOB and to the SIX on a daily basis every purchase or sale of equity securities in the target. The TOB publishes such transactions on its website. Industry-Specific Notification Obligations In certain regulated industries, the acquisition of sig - nificant participations in a company – whether listed or not – has to be notified to the regulator. For instance, persons or entities who reach or cross the thresholds of 10%, 20%, 33% or 50% of the capital or voting rights of a bank or insurance company have to notify FINMA before completing the transaction. FINMA has the power to prohibit or impose conditions on such transactions in some cases. 4.3 Hurdles to Stakebuilding In addition to the statutory disclosure obligations, there are other hurdles to stakebuilding: if the bidder or any of the parties acting in concert with it pos - sesses material non-public information on the target (“inside information”), they must not deal in, or tip another person in relation to, target securities. Fur - ther, the rules on market manipulation also apply to stakebuilding. Finally, the price paid by the bidder or any parties acting in concert for equity securities of the target within 12 months prior to the publication of the pre- announcement (or the offer prospectus if no pre- announcement is made) sets a floor on the offer price, unless the target has opted out of the mandatory offer rule (see 6.2 Mandatory Offer Threshold ). Note that, according to the so-called best price rule, if the bidder pays a higher price than the offer price for target securities during the offer period or until six months after the end of the additional acceptance period, the bidder must offer that higher price to all shareholders. 4.4 Dealings in Derivatives Dealings in derivatives are allowed but are subject to the same disclosure obligations as dealings in shares
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