“If it were up to some former shareholders of Credit Suisse, the takeover price paid by Swiss bank UBS for the troubled rival Credit Suisse would be subjected to legal scrutiny. The Swiss investment association SASV, along with a group of investors, has initiated a lawsuit at the Zurich court that handles corporate affairs. The investors (about a thousand in total) believe that they received too low an amount when Swiss bank Credit Suisse was acquired by rival UBS earlier this year. Shareholders feel aggrieved because they were paid the equivalent of 0.76 Swiss francs (0.79 euros) per Credit Suisse share in March, while just two days before the forced takeover, for which a special law was passed, a share of the Swiss major bank was still worth 1.86 francs. Furthermore, according to SASV, all of the bank’s assets were valued at 13.70 francs per share according to its own accounting. “The takeover price […] was determined without any basis during a rushed process,” SASV wrote in a call to investors to join the lawsuit. “Moreover, the deal has turned out to be far too advantageous for UBS.” According to SASV, both objections can also be inferred from the process. UBS initially offered 1 billion francs and then, under pressure from Swiss politics, increased it to 3 billion. “The takeover of Switzerland’s second-largest bank by the largest bank had the character of a bargaining, where the selling price is arbitrarily determined.” The takeover of Credit Suisse was orchestrated by the Swiss government at the end of March. The bank had encountered major problems due to a series of scandals. After an accounting irregularity was found, the stock price plummeted, and 10 billion francs of savings were withdrawn from the bank every day. The involved investors may feel strengthened by UBS’s decision last week to terminate the government-provided guarantees surrounding the takeover. To persuade UBS to take over the rival, the Swiss government had guaranteed a loss of 9 billion francs on losses on the new assets, such as write-downs or future fines. The central bank had also provided a guarantee of 100 billion francs. Not the only lawsuit Those government guarantees were heavily criticized at the time. Despite all the rules put in place after the credit crisis, why was taxpayer support needed again? UBS said last Friday that after further examining all of Credit Suisse’s assets covered by the guarantees, it had concluded that it did not need government assistance. Investors could infer from this that UBS also believes Credit Suisse was less unhealthy after the takeover than was suggested. The group of investors who have joined the lawsuit over the takeover price, according to SASV, consists mainly of small investors from Switzerland and employees and former employees of Credit Suisse who were paid in bank shares. Consequently, participants also come from the UK, the United States, Germany, Austria, and the Netherlands – countries where employees of the internationally operating Credit Suisse come from. SASV could not specify how many Dutch investors are involved in the claim. The SASV case is not the only lawsuit over the takeover. Earlier, a number of larger investors had already joined a case by a commercial party. Additionally, according to the Zurich court, various individuals have come forward. SASV expects their case to last about a year and a half if a judicial decision were to be reached. However, the association says it is open to a settlement discussion with UBS.”
