Retail investors in Credit Suisse have launched a class-action lawsuit over the firm's £2.7bn takeover by UBS earlier this year.
The Swiss Association for the Protection of Investors (SASV) is set to file a lawsuit later today (14 August) representing more than 500 shareholders over the price of the deal that was expedited by Swiss regulators in March.
The lawsuit primarily consists of small investors from Switzerland and former employees of Credit Suisse with now "almost worthless shares," SASV said.
After Credit Suisse's 25% share price drop on 15 March, the bank took a loan from the Swiss National Bank, allowing it to remain afloat until Swiss regulators could negotiate a deal with UBS later that week.
However, the deal negotiated valued the bank at CHF 0.76 per share, less than half the bank's market value on its final day of trading before the deal was reached - CHF 1.86 per share.
Meanwhile, the book market price on 31 March 2023 was CHF 13.70 per share, SASV said.
This meant that the price of the deal "was not only determined without any well-founded basis for decision-making within the framework of a hasty action, but this exchange ratio also turned out to be far too advantageous for UBS," the investor group argued.
SASV noted that UBS originally offered CHF 1bn, then CHF 3bn for Credit Suisse, compared to the firm's equity capital of CHF 54bn at the end of March 2023, leaving a ‘badwill' of CHF 51bn.
It added that shareholders had no opportunity to vote on the deal, with numerous control mechanisms for takeover from the Swiss regulator "abolished".
"Moreover, the exchange ratio has not been independently verified to date," added SASV.
"A judicial review and correction of this exchange ratio by an appropriate expert is therefore necessary in order to determine the fair value of Credit Suisse and to examine the appropriateness of the exchange ratio."
SASV is bringing the case on a not-for-profit basis, with Zurich-based law firm Niedermann Rechtsanwälte representing claimants.
Last week, UBS said it would not need government support for the takeover, relieving pressure from the company over a politically unpopular decision.