KUNN SW - Swiss Takeover Board rejects appeal filed by Kuoni und Hugentobler Foundation
The Swiss Takeover Board today rejected the appeal filed by the Kuoni und Hugentobler Foundation on 7 March, which upholds the Swiss Takeover Board’s 25 February 2016 decision. On 25 February 2016, the Swiss Takeover Board determined among other things that:
The limited exclusivity provided for in the Term Sheet dated 1 February 2016 between Kuoni und Hugentobler Foundation and EQT is not permissible according to takeover law.
The review body took into consideration whether the further monetary benefits exchanged between EQT and the Kuoni und Hugentobler Foundation in addition to the purchase price paid for the contributed Kuoni A shares (CHF 370 for 5 Kuoni A shares) and the consequential benefits would be in compliance with the Best Price Rule. The benefits taken into account included: (i) EQT obtaining a significant position as shareholder of the target company, (ii) restricted exclusivity agreement, (iii) regulations to EXIT respectively the drag along right.
Should the benfits granted by the offeror (and the persons acting in concert with it) show a net surplus, the review body shall state by how much the Offer Price for the Kuoni B shares is to be increased.
We note that as of the date of the Offer Prospectus (29 February), the value at which the Kuoni A shares will be contributed has not yet been agreed. Therefore, in our view, EQT can either (i) increase the price paid for the Kuoni B shares so that the total monetary value adequately reflects the benefits received by the Kuoni und Hugentobler Foundation, or, (ii) revise the terms of EQT’s transaction agreement with Kuoni und Hugentobler Foundation so that the consideration and benefits received is in line with the CHF 370 Offer Price the Kuoni B shareholders will receive.