5: Public Take-Over Bids
Art. 22 Applicability
1 The provisions of Chapter 5 (Art. 22 - 23) as well as well of Art. 52 and 53 apply to all public take-over bids for shareholdings in Swiss companies whose equity stock is at least in part quoted on a stock exchange in Switzerland (target companies).
2 The companies may, prior to the quotation of their equity stock pursuant to par. 1, lay down in their by-laws that a purchaser is not obligated to a public take-over bid in accordance with Art. 32 and 52.
3 A company may at any time add to their by-laws a provision in accordance with par. 2, in so far as this does not adversely affect the shareholders within the meaning of Art. 706 of the Code of Obligations.
Art. 23 Take-Over Commission
1 The Supervisory Authority shall establish a commission for public take-over bids (Take-Over Commission) after an informal hearing of the stock exchanges. This Commission shall be comprised of expert representatives of the security dealers, quoted companies and investors. The organisation and operating procedures of the Take-Over Commission are to be submitted to the Supervisory Authority for approval.
2 The provisions which are issued by the Take-Over Commission pursuant to this law require approval by the Supervisory Authority.
3 The Take-Over Commission shall verify compliance with the provisions concerning public take-over bids on a case-by-case basis. It may demand all information and documents from bidders and target companies. It issues recommendations to the parties involved and may publish these.
4 If its recommendations are rejected or disregarded, it shall report this fact to the Supervisory Authority. This latter may issue a supervisory order.
5 The stock exchanges bear the costs of the Take-Over Commission. This latter may charge fees to bidders and target companies.
Art. 24 Duties of the bidder
1 The bidder must publish the bid with true and complete information in the prospectus.
2 He must treat the owners of equity stock of the same type in the same manner.
3 The duties of the bidder apply to all who act in common accord with him.
Art. 25 Examination of the bid
1 The bidder must, prior to publication, submit the bid for verification to an auditing firm recognised by the Supervisory Authority or to a security dealer.
2 The examining company shall verify whether the bid is in agreement with the law and the implementing provisions.
Art. 26 Right of withdrawal of seller
The seller may withdraw from contracts or annul sales which have been already settled if these were concluded or made on the basis of a prohibited bid.
Art. 27 Publishing of the result of the bid and extension of deadline
1 The bidder must publish the result of the public take-over bid after the elapse of the deadline for the bid.
2 If the conditions of the bid are fulfilled, the bidder must extend the deadline for the bid for those owners of shares and other equity stock who until then did not accept the bid.
Art. 28 Supplementary requirements
The Take-Over Commission shall issue supplementary provisions concerning:
a. the pre-notification of a bid prior to its publication;
b. the contents and publication of the bid prospectus as well as the conditions to which a bid can be subjected;
c. the rules concerning transparency in relation to public take-over bids;
d. the verification of the bid by an auditing firm or a security dealer;
e. the deadline for the bid and its extension as well as the conditions for withdrawal and modifications to the bid as well as the deadline for the seller to rescind contracts;
f. acting in common accord with third parties.
Art. 29 Duties of the target companies
1 The Board of Directors of a target company (Art. 22 par. 1) shall submit a report to the holders of the equity stock in which it takes position on the bid. The information given by the target company must be true and complete. The Board of Directors shall publish the report.
2 From the time of the publishing of the bid to the publishing of the result, it may not adopt resolutions on any legal acts as a result of which the assets and liabilities of the company would be modified in a significant manner. Resolutions of the general meeting of shareholders are not subject to this restriction and may be executed irrespective of whether they were passed before or after the publishing of the bid.
3 The Take-Over Commission shall issue provisions regarding the report of the Board of the target company and concerning the measures improperly designed to thwart a bid or hinder its success.
Art. 30 Competing bids
1 In the case of competing bids, the holders of equity stock of the target company must be able to choose the bid freely.
2 The Take-Over Commission shall issue provisions concerning competing bids and their effects on the first bid.
Art. 31 Obligation to notify
1 The bidder or whoever owns, directly, indirectly or in common accord with third parties, a shareholding of more than 5% of the voting rights, whether exercisable or not, of the target company or if applicable of another company whose shares are offered in exchange, must report to the Take-Over Commission and to the stock exchanges on which the stock is quoted, each purchase or sale of equity stock of this company from the time of the publishing of the bid until the expiry of the deadline for the bid.
2 A group organised on the basis of a contract or another manner is subject to the notification requirement set out in par. 1 only as a group.
3 The Take-Over Commission may subject to the same requirement any person who, from the date of publication of the bid and until the expiry of the bid period, purchases or sells, directly, indirectly or in common accord with third parties, a certain percentage of the equity stock of the target company or of another company whose equity stock will be offered in exchange.
4 Should the company or the stock exchanges have reason to suppose that an owner of equity stock has not fulfilled his obligation to notify, they shall inform the Take-Over Commission of this fact.
5 The Take-Over Commission shall issue provisions concerning the format and timing of notification and the relevant percentage for the application of par. 3.
Art. 32 Requirement to submit a bid
1 Whoever directly, indirectly or in common accord with third parties, acquires equity stock and thereby, together with the stock he already possesses, exceeds the threshold of 33 1/3 rd percent of the voting rights, whether they are exercisable or not, of a target company, must submit a bid for all quoted equity stock of the company. The target companies may, in their by-laws, lift the threshold to 49% of the voting rights.
2 The Supervisory Authority may grant exemption from the bid requirement in justified cases, namely:
a. in the case of the transfer of voting rights within a group organised on the basis of a contract or another manner. In this case, the group is subject to the bid requirement only as a group.
b. if the excess results from a reduction of the total number of voting rights of the company;
c. in the case of a temporary excess over the marginal threshold;
d. in the case of gratuitous issue or preferential subscription on the occasion of a capital increase;
e. in the case of acquisition for the purposes of a company reorganisation.
3 The duty to bid elapses when the voting rights are acquired by way of donation, inheritance, distribution of an estate, law of matrimonial property or execution of the law.
4 The bid price must correspond at least to the quoted price and may be at most 25% under the highest price which the bidder paid for the equity stock of the target company during the preceding 12 months.
5 Should the company have issued several types of equity stock, the prices of the various types of equity stock must be in appropriate relationship to one another.
6 The Supervisory Authority shall issue provisions regarding the requirement to submit bids. The Take-Over Commission shall have a right of motion.
7 At the request of the Supervisory Authority, the target company or of one of its shareholders, the judge may by a temporary injunction suspend the voting rights of those who have not respected the bid requirement.
Art. 33 Cancellation of remaining equity stock
1 Should the bidder, after expiry of the bid period, possess more than 98% of the voting rights of the target company, he may request from the court within a deadline of 3 months that the remaining equity stock be declared void. The bidder must commence legal action against the company for this purpose. The remaining shareholders may join the proceedings.
2 The company shall re-issue this equity stock and transfer it to the bidder against payment of the bid price or completion of the exchange offer in favour of the owners of the stock declared void.
KPMG Fides Unofficial Translation of Swiss Federal Stock Exchange Law
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