A Liechtenstein-based law firm has filed what is now the third class action lawsuit related to the price UBS paid for Credit Suisse. The plaintiffs are seeking appropriate compensation.
Lennert Partners AG, a law firm based in Liechtenstein filed a class action in the Commercial Court of Zurich yesterday, the final day to file such a suit, according to an emailed statement from the firm. The lead plaintiffs are an investment fund and a private individual.
Other plaintiffs include other investors representing an investment volume of several million Credit Suisse shares who are seeking «appropriate compensation payment» of at least 7.78 Swiss francs ($8.86) per share, which is significantly higher than comparable class actions, according to the law firm.
UBS paid about three billion Swiss francs for Credit Suisse in treasury shares, with shareholders receiving one UBS share for every 22.48 Credit Suisse shares held corresponding to a valuation of 76 centimes per share. Credit Suisse's share price closed at 1.86 francs on March 17, leaving a market capitalization of around 7.4 billion francs.
«From the beginning, we had investment companies and intermediaries in mind rather than small shareholders,» Philipp Lennert managing partner of the eponymous firm told finews.asia. «Our goal was to represent the owners of at least 1 million Credit Suisse shares as plaintiffs. We have clearly exceeded that,» he added.
No Valuation Scheme
«The exchange relationship between Credit Suisse and UBS shares doesn't follow any valuation scheme. It is not only completely inappropriate but has been set arbitrarily. This reinforces the impression that there was no negotiating parity between the negotiators of the merger agreement,» Lennert said, according to the statement.
He went on to say the merger was to be carried out «on the back of Credit Suisse shareholders,» and called for a company valuation based on recognized standards to be carried out as part of the judicial review that has now been initiated. Considering the average of the current company valuations, partly published by UBS, the value is 7.78 francs per share, and the «amount to be used to settle the action.»
Memories of Bear Stearns
The UBS/Credit Suisse deal isn't the first emergency bank merger in history, nor the first in an acute crisis. One of the biggest was certainly the takeover of American investment bank Bear Stearns by its larger rival JPMorgan at the start of the financial crisis in March 2008 when Bear Stearns fell victim to a liquidity crisis.
At the time of the sale, an exchange ratio was agreed upon that corresponded to $2 per share, about 7 percent of the previous market value. After a shareholder class action lawsuit was filed a few days later, JPMorgan raised the valuation to $10 per share the same day.
Lennert Partners is a business law firm founded in 2014 and based in Liechtenstein. The focus of the firm's activities is on providing international legal and tax advice to private clients and financial intermediaries. Its staff consists of lawyers, tax advisors, auditors, and notaries, usually with a large German law firm background.
