In a recent Takeover Board case, the offeror filed a request with the board for approval that it should – before the distribution of the special dividend – have the right to acquire shares outside the offer without triggering the best-price rule. In its decision, the board stressed the importance of the offer price as a reference for the best-price rule and held that any acquisition of shares for a consideration above the offer price would violate the rule.
Swiss M&A transactions involving public companies are mainly governed by the Financial Market Infrastructure Act, which replaced the former Federal Act on Stock Exchanges and Securities Trading. This regulates both friendly and hostile public takeovers for Swiss resident companies with at least one class of equity security listed on a Swiss exchange, and for foreign resident companies whose shares are mainly listed on a Swiss exchange.
On January 1 2016 revised regulations for the disclosure of significant shareholdings in listed companies and amendments to takeover regulations took effect. The new regulatory framework regulates key market infrastructures and incorporates many former provisions of the Stock Exchange Act, including those on public takeovers and those relating to the disclosure of significant interests in listed companies.
In the context of a friendly public offer, the bidder will usually seek to enter into a transaction agreement with the target. Such a transaction agreement customarily includes provisions regarding the continuance of the contractual relationship between the target and its management, as well as the (dis)continuance of certain target board members' mandates as per the settlement of the public offer.
The Federal Council recently enacted the Financial Market Infrastructure Act. While the act requires the formal alignment of the Takeover Ordinance with the provisions relating to takeovers, the amended ordinance brings substantive changes. By implementing these changes, the Takeover Board acknowledges that electronic publication has become the standard procedure for disseminating important financial information.
An amendment of the Ordinance of the Takeover Board on Public Takeover Offers has entered into force, abolishing the requirement that announcements and notices relating to a public offer be physically published in newspapers. Consequently, the Takeover Board has issued guidance on the newly applicable rules for the publication of the offer documents.
In March 2013 the Swiss voting population approved the fiercely debated 'Rip-off Initiative', originally launched in 2008 by Thomas Minder. Its incorporation into national law is now ongoing. It remains to be seen how this will affect public M&A transactions involving Swiss corporations with publicly listed shares. The consequences are extensive and company boards should carefully consider the implications.