A Swiss proxy adviser representing some former Credit Suisse shareholders has backed a class-action lawsuit seeking a better price from UBS (UBSG.S) for its takeover of its cross-town rival, it said on Tuesday.
Ethos Foundation, which represents a Swiss pension funds that owned more than 3% of Credit Suisse, "has decided to support the Lausanne-based legal start-up LegalPass in its legal action against the exchange ratio set in the context of the acquisition of Credit Suisse by UBS," it said in a statement.
Under the deal, sealed last month, Credit Suisse shareholders were offered one UBS share for 22.48 Credit Suisse shares, valuing the stricken bank at 3 billion Swiss francs ($3.35 billion).
Just 48 hours before deal was struck, Credit Suisse was worth 7 billion francs, Ethos said.
"The exchange ratio ..was really not in the best interest of Credit Suisse’s shareholders and that there is room to improve it," said Ethos Chief Executive Vincent Kaufmann.
If successful, all Credit Suisse shareholders would benefit from the new exchange ratio, it said.
The case is the latest legal battle prompted by the emergency takeover, with holders of Credit Suisse's Additional Tier 1 bonds - which were all written down to zero - also claiming compensation.
A group of Credit Suisse AT1 bondholders has also filed a class action suit accusing former executives at the Swiss bank, including three past CEOs, of being responsible for the bank's downfall.
'ADEQUATE COMPENSATION'
The LegalPass claim comes under the Swiss mergers act which allows for a "verification of the exchange ratio" that enables shareholders to claim "adequate compensation" for their shares, LegalPass said last month.
The aim is to enable shareholders to obtain cash compensation corresponding to the difference in value between the share price determined in the merger contract and the price determined by the court.
Ethos has previously raised concerns about how the acquisition of Credit Suisse by UBS was carried out, particularly that the deal was forced through without consulting shareholders.
"Since (Swiss financial regulator) FINMA has decided to withdraw shareholders' voting rights, the only way to challenge the exchange ratio is to go court, as LegalPass intends to do," Kaufmann added.
UBS declined to comment on the case, which will be filed before a court in Zurich.
Launching the claim last month, LegalPass said UBS's acquisition of Switzerland's second biggest bank was a "steal" with UBS document valuing the Credit Suisse business at almost $34 billion.
"Credit Suisse was sold below its market price during secret negotiations and under governmental pressure, all without shareholders having any say in that matter," said Alexandre Osti, a lawyer at LegalPass.
LegalPass has set a of July 20 deadline to join the class action.
($1 = 0.8965 Swiss francs)
