More than 500 individual investors – including former Credit Suisse employees – have backed a lawsuit by the Swiss Investor Protection Association (SASV) over the failed bank’s $3.4bn acquisition by rival UBS.
The claim will be filed with Zurich’s commercial court on Monday and becomes the second class action by Credit Suisse shareholders targeting UBS.
SASV’s lawsuit on behalf of predominantly Swiss private investors notes the acquisition priced Credit Suisse shares at less than half their value on the final day of trading before the deal was struck.
The takeover brokered by Swiss authorities also denied shareholders in either bank a vote on the deal.
In a statement last week, SASV said investors had received part of their remuneration in now “almost worthless shares”, however, it noted it could not guarantee an improved outcome as a result of its claim “despite UBS’s objectionable approach”.
It added the exchange ratio of 22.48 Credit Suisse shares per UBS share was determined without a “well-founded basis” and as part of “hasty action” which proved “far too advantageous for UBS”.
SASV also said UBS’s second lump sum offer of CHF3bn compared to Credit Suisse’s CHF54bn of equity capital at the time resulted in CHF51bn of “badwill”.
“The takeover of the second largest Swiss bank by the largest bank had the character of horse trading, in which the purchase price was arbitrarily determined,” it argued.
The group is bringing its case under Article 105 of the Merger Act questioning whether the share and membership rights of Credit Suisse shareholders were adequately safeguarded during the takeover.
SASV alleges numerous control mechanisms detailed in the Act were “abolished” and the review is therefore in the interest of “the entire Swiss financial centre”.
Shareholders participating in the suit are represented by Niedermann Rechanwalte, with the judge presiding set to rule on the case within a year.
Last week, UBS announced it no longer required government support for its acquisition of Credit Suisse – news that could shift some negative public sentiment regarding the deal.
By May, investors representing a third of Credit Suisse’s $17bn additional tier one (AT1) bond issuance had filed lawsuits against Swiss regulator Finma after their bonds were written down to zero.
The second group to enter proceedings comprised 90 institutional investors and 700 family offices.