UBS faces new class action

investmentnews.com:

Zurich’s commercial court is set to witness another lawsuit against UBS’s contentious acquisition of Credit Suisse. This fresh challenge is spearheaded by the Swiss Investor Protection Association, representing approximately 500 Credit Suisse equity investors, and is expected to be lodged Monday.

These investors, including numerous ex-employees of the beleaguered bank, endured significant losses when UBS stepped in to salvage Credit Suisse earlier this year.

“The SASV’s action under Art. 105 of the Merger Act deals with the question of whether the share and membership rights of CS shareholders were adequately safeguarded in the context of the takeover of CS by UBS. CS shareholders received only one UBS share for every 22.48 CS shares,” the association said.

Swiss authorities had choreographed this takeover, barring shareholders from both banking giants to cast their vote on the transaction. The acquisition price of $3.4 billion by UBS was significantly lower than Credit Suisse’s market value the day prior to the deal’s finalization, much less than its actual book value.

This lawsuit isn’t the first against UBS regarding this acquisition; shareholders had previously lodged a class action, with bondholders also taking legal action.

In a significant development last week, UBS declared that government backing for this acquisition was no longer required, a move tat was probably designed to temper public dissatisfaction ahead of the forthcoming October national elections.

Arik Röschke, the general secretary of the SASV, commented on the looming case that is set to be filed under the Swiss Merger Act. He hinted at a possible out-of-court settlement, emphasizing the colossal compensation UBS might have to shell out if the court