SWITZERLAND Law and Practice Contributed by: Frank Gerhard, Andreas Müller and Timo Hasler, Homburger
and drawbacks of the offer without making a recom - mendation. The report also has to contain certain information, notably updated interim financial statements, if the cut-off date of the last published financial statements would otherwise, at the expected end date of the offer period, be older than six months. Additional required disclosures relate to potential conflicts of interest among the members of the board or the management of the target, among other things. Negotiated Transactions In a negotiated transaction, the target often procures a fairness opinion from an audit firm or investment bank selected by it. In limited circumstances, a fair - ness opinion is required by law. The fairness opinion is a detailed valuation report and must explain the basis for the fairness conclusion (eg, peer groups, valuation parameters, but not the target’s business plan). It has to be published as part of the board report. The bidder and the target usually agree on the content of the offer prospectus and the board report (which is typically included in the offer prospectus). Before the offer is announced, the bidder and the target would file a draft offer prospectus (including the report by the Independent Review Body, the board report and the fairness opinion) with the TOB, which issues a deci - sion as to whether the offer prospectus complies with applicable laws and regulations. After the publication of the pre-announcement (or the offer prospectus if no pre-announcement is made), the bidder, the parties acting in concert with it (which may include the target itself) and significant shareholders of the target have special disclosure obligations with regard to their dealings in target shares (see 4.2 Mate- rial Shareholding Disclosure Threshold ). If the transaction results in the listing of new shares on the SIX (eg, if the bidder is listed on the SIX and offers its own shares as consideration), the relevant listing
circumstances, it offers own shares as consideration). However, the board of directors of the target has to establish interim financial statements for its report (see 7.2 Type of Disclosure Required ) if the cut-off date of the last published financial statements would, at the expected end date of the offer period, otherwise be older than six months. The interim financial state - ments must be in the same form as those that the target usually publishes. 7.4 Transaction Documents Besides the offer prospectus, the report by the tar - get board and the report by the Independent Review Body, no transaction documents have to be disclosed in full. The key terms of any agreements between the bidder and the target (but not the agreements in full) have to be disclosed in the offer prospectus. 8. Duties of Directors 8.1 Principal Directors’ Duties Directors and officers of a Swiss corporation have: • a duty of care; • a duty of loyalty; • a duty to safeguard the interests of the company in good faith; and • a duty to treat shareholders equally in like circum - stances. These duties are owed to the company, and direc - tors and officers may take into account the position of the company’s stakeholders and shareholders in their actions. In a business combination, the directors and officers of the companies involved have the same fiduciary duties as they have in their daily business. The board of the target of a public tender offer has some additional specific obligations. For instance, the target board must seriously consider an approach by a potential bidder, but, in normal circumstances, it is not obliged to initiate an auction. The target board also has to treat bidders equally in some circumstances. For example, a competing bid - der must be granted the same due diligence access as the target board’s preferred bidder (see 5.3 Scope
requirements have to be complied with. 7.3 Producing Financial Statements
A bidder does not need to include financial state - ments in the offer prospectus (unless, under specific
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