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Case Study

Sulzer takeover battle

By Stewart Hamilton and Anna Eckardt

8 pages

December 2011

Reference: IMD-1-0319

Sometime during the evening of the 20th of April 2007 a significant number of Sulzer shares had changed hands “off-bourse” – allowing an investment group called Renova to get an effective 32% stake in the Swiss engineering firm within minutes without having disclosed any prior holdings. This revelation caused a public outcry about the way the Swiss icon has been outmanoeuvred. The more details about what the press called the “Sulzer scandal” became public, the more it became clear to what extend Sulzer’s principal bank, the Züricher Kantonal Bank (ZKB) and some other banks were engaged in the corporate raid. As a result a number of bankers involved, including the CEO of the ZKB, had to step down from their positions. Ultimately the Swiss Financial Market Supervisory Authority launched the largest ever inquiry at the time. It was concluded after almost three years with the clear verdict that disclosure rights has been disregarded and that the ZKB had seriously infringed its duties towards its client. The Sulzer case became the catalyst for changing the Swiss Stock Exchange Act to adapt to the realities of the fast-changing and increasingly creative stock markets.

Learning Objective

Understand the realities of Stock Markets; recognize the need for vigilance over shareholdings; awareness of the potential use of unconventional financial instruments; consideration of potential ethical issues around hostile acquisitions.

Keywords

Corporate Raid, Takeover, Finance

Settings

Switzerland
2006-2009

Type

Published Sources

Available Languages

English

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