On August 28, CS plaintiffs' representatives Legalpass and Zurich law firm Baumgartner Mächler filed a request for an independent appraisal with the Zurich Commercial Court. The Liechtenstein law firm Lennert Partners had also previously called for an independent revaluation, as reported by finews.ch.

Is the Compensation Fair?

The request was submitted by Legalpass as part of their response to UBS’s legal defense, according to a statement released Tuesday. The issue at hand is «whether the 3 billion francs was fair compensation for the Credit Suisse businesses acquired and continued by UBS.»

The plaintiffs' representatives cite an independent valuation by IVA Valuation & Advisory and a legal opinion from Prof. Dr. iur Harald Bärtschi.

According to their findings, the estimated value of the CS share ranged from 3.67 to 9.26 francs, depending on the valuation method employed. In contrast, UBS established the exchange ratio at 0.76 francs per CS share.

Based on Ongoing Operations

The plaintiffs argue that Credit Suisse’s valuation should be based on the continuation of its business operations. By March 19, 2023, it was already clear that CS activities would be continued as part of UBS. «The valuation must reflect the actual circumstances, i.e., the continuation of the business, and not hypothetical or irrelevant scenarios like bankruptcy or bail-in,» the statement reads. This position aligns with Swiss Federal Court precedent.

The IVA valuation necessarily relied on publicly available information, as there was no merger report and UBS did not disclose internal CS data. Using the Dividend Discount Model (DDM), the appraisal arrived at a value range of 3.67 to 4.39 francs per share. IVA also extrapolated financial projections from a neutral analyst's report prepared just before the merger, indicating a value between 7.70 and 9.26 francs per share.

Economically Unjustifiable

Overall, the IVA report concludes that «the agreed exchange ratio of 22.48 Credit Suisse shares for one UBS share on March 19, 2023, is not economically justifiable.»

The Swiss Merger Act grants shareholders the right to have the exchange ratio reviewed, and this must be properly enforced. In addition to a new appraisal, the plaintiffs are requesting that the court compel UBS to disclose internal financial data on CS, which could lead to results «that significantly differ from the private appraisal, both upward and downward.»

Approximately 3,000 Plaintiffs

Legalpass, founded in 2022 by attorneys Philippe Grivat and Alexandre Osti, is a Swiss startup based in Lausanne. In June last year, the firm filed the «Credit US» class action lawsuit in the Zurich Commercial Court. According to earlier reports, around 3,000 former Credit Suisse shareholders have joined the lawsuit.