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The Takeover Board is a federal commission established under the Swiss Federal Act on Stock Exchange and Securities Trading (SESTA). It has jurisdiction to issue general rules and ensure compliance of public offers with the provisions of SESTA. In particular, potential offerors and their legal advisors should be aware of the following recommendations issued by the Takeover Board.

Obligation to make an offer by members of an organized group: In the Recommendation in re Quadrant AG dated July 23 2002 the Takeover Board surprised many with a broad definition of organized groups. It held that organized groups may be formed based on social relationships (business connections) even if there is no contractual relationship between the parties. This case is now pending in the Federal Court.

Fairness opinion: As a result of the Recommendation in re EIC Electricity AG dated August 21 2003, fairness opinions now have to be much more detailed than in the past. They now have to disclose the detailed basis and the parameters (such as discount rates and historical share prices) of the valuation.

Principle of equal treatment: If there is a parallel foreign offer (for example, if securities are listed on the Swiss Stock Exchange and American Depository Receipts are listed on the New York Stock Exchange) and the foreign takeover law grants more favourable rights to the offerees, equal rights have to be granted to the offerees in the Swiss offer (Recommendation in re Centerpulse AG dated April 16 2003).

Right to revoke the acceptance in case of a competing offer: The Takeover Board held that it is unlawful for a shareholder to enter into an agreement with the initial offeror and waive its right to revoke acceptance in case of a competing offer (Recommendation in re InCentive Capital AG dated June 11 2003).

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