infonet-economy

The Swiss government has recently submitted a bill amending the Stock Exchange and Securities Act of 1995. As far as takeover bids are concerned, the bill proposes to require that the price of a mandatory of- fer or any offer for all outstanding shares of the tar- get company be no less than the highest price paid by the offeror (and other persons acting in concert) over the preceding 12 months. We review the legislative history of the existing rule, which allows the offeror to buy shares before announcing the offer at a premium of no more than 331⁄3% over the offer price. We then discuss the reasons why this rule should be modified so that all shareholders receive the same price, irrespective of whether they sell their shares to the offeror before the announcement or they tender their shares during the offer.