ALTIN, the Swiss alternative investment company, is currently evaluating different options to implement the share buyback programme announced in March 2013 to acquire up to 10 per cent of the share capital.
Switzerland’s recent amendments to its stock exchange legislation affect the way share buybacks are implemented. A revision of the Stock Exchange Ordinance (SESTO) that has come into force on 1 May 2013 limits daily share buybacks to 25 per cent of the average daily volume without granting a general permission for off-exchange transactions (block trades).
Given the relatively low trading volume on investment companies such as ALTIN, buying back 10 per cent of the share capital as planned could then take up to 24 months. Even if an exemption might be awarded by the Swiss Takeover Board that would authorise buying up to 50 per cent of the daily volume, the intended buyback programme would still take some 12 months to complete.
As a consequence, ALTIN's board of directors is currently analysing other alternatives, such as issuing put options that would be assigned to shareholders. Shareholders wishing to exercise the options would sell shares to the company for later cancellation, achieving the same result as a conventional buyback on a second trading line.
Specific terms of such options remain to be determined and tax and operational aspects are being examined by the board, as the tax situation for institutional and private investors is different. No decision has been taken for the time being and the board will take all interest of the shareholders into account when making a decision.