Public Takeovers in Switzerland - Review 2008 (Part 2)
Mondaq Business Briefing › Switzerland Law Articles in English (2010)
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Public Takeovers in Switzerland - Review 2008 (Part 2)
Best Price Rule
Distinction from Minimum Price Rule. If the bidder acquires equity securities of the target company in the period running from the publication of the offer until six months after expiry of the additional acceptance period at a price that exceeds the offer price, it must offer this price to all recipients of the offer (and not only to those who have accepted the public offer) 55 (Art. 10 para. 6 OTB). A share purchase by the bidder will only be subject to the minimum price rule (i.e., the bidder may pay a premium of up to 33 1/3% above the offer price), rather than both the minimum price rule and the best price rule, if such purchase qualifies as a purchase prior to the launch of the takeover offer. 56 More particularly, if the share purchase agreement is entered into prior to the announcement of the takeover offer, and the closing under the share purchase agreement occurs prior to the announcement of the offer; or after the announcement of the offer and is not subject to any condition precedent or subsequent related to the success of the takeover offer, 57 such share purchase will be considered to be a purchase prior to the announcement takeover offer, in the sense of Art. 41 OTB. Consequently, such share purchase will be relevant when assessing compliance with the minimum price rule (see above under Minimum Price Rule), 58 but will not trigger the application of the best price rule. However, if the bidder enters into a share purchase agreement with target shareholders prior to the announcement of the takeover offer, but the closing under the share purchase agreement is subject to the completion of the takeover offer (so called "coupled transaction"), 59 such share purchase will trigger the application of the best price rule. In general, a takeover offer may not be made conditional upon the closing of another share purchase without triggering the best price rule. In such a case, the conditions to closing under the share purchase agreemen...See the full content of this document
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