SWITZERLAND Law and Practice Contributed by: Frank Gerhard, Andreas Müller and Timo Hasler, Homburger
(see 4.2 Material Shareholding Disclosure Thresh- old ). 4.5 Filing/Reporting Obligations Derivatives are subject to the same disclosure rules as other securities. In addition, if a Swiss counterparty is involved in derivatives trading, the general regulations and reporting obligations with respect to derivatives trading in Switzerland set out by the Financial Market Infrastructure Act and its implementing ordinances apply. 4.6 Transparency Before the pre-announcement of a public tender offer, shareholders do not have to make known the purpose of their acquisition of target securities or their intention regarding control of the company. Persons acquiring target securities in concert have to describe the nature of their group when they have to disclose their aggre - gate shareholdings. This description may, however, be rather generic. Companies listed in Switzerland must publicly dis - close any price-sensitive facts that have arisen in their sphere of activity and are not public knowledge (so-called ad hoc publicity). Any information capable of triggering significant changes in the share price is considered price-sensitive. As a result, public M&A deals typically qualify as price-sensitive facts and would need to be announced as soon as the target gains knowledge about the main facts of the deal. However, a target may decide to postpone such dis - closure to review an unsolicited offer or to explore or negotiate the terms of a recommended offer, provided that the target is able to maintain strict confidentiality of the price-sensitive facts during the time that dis - closure is postponed. If details of the approach or offer, whether solicited or not, leak into the market, the target and, if the bidder is a Swiss-listed company, the bidder must make announcements to the SIX and the public without delay. It should also be noted that a target, absent a contractual commitment to keep the approach or the negotiations in confidence, may 5. Negotiation Phase 5.1 Requirement to Disclose a Deal
decide to make the approach or the negotiations pub - lic at any time. 5.2 Market Practice on Timing Unless there is a leak, a friendly takeover offer is usu - ally announced with a joint press release and in a joint press conference at the time when the bidder publishes the formal pre-announcement (or the offer prospectus if no pre-announcement is made). One of the reasons for not announcing the deal earlier is that the volume weighted average price (VWAP) of the listed shares during the 60 trading days before the pre-announcement sets a floor on the offer price (in In public M&A, potential bidders often conduct a due diligence review based on public information before they approach the target, even if they plan to enter into a negotiated deal. Since opportunities to with - draw from an announced bid are limited, a bidder would usually want to perform as much due diligence as possible before announcing an offer. The Target Board the case of mandatory offers). 5.3 Scope of Due Diligence The target board has wide discretion when decid - ing on a bidder’s request to conduct due diligence. In particular, a bidder is not entitled to conduct any additional due diligence and if a target board decides that the company is not for sale, it does not have to allow due diligence to anyone. If, however, the target board does allow due diligence to a bidder, it has to treat bidders that launch a competing bid equally. A target board that allows due diligence is likely to disclose information sequentially and to restrict the scope of due diligence generally, subject to appro - priate confidentiality undertakings by the bidder and its advisers. Typically, a due diligence review involves a relatively small number of senior personnel of the bidder, who focus on key aspects of the target’s busi - ness, in addition to the review performed by the bid - der’s legal, financial and tax advisers. A bidder must certify in the offer prospectus that it has not received material non-public information on the target that would be likely to have a decisive influence on the decision of the target shareholders whether
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