Share exchange offer

A share exchange offer (offre publique d'échange — OPE) is a public acquisition proposal in which the acquirer offers its own shares (or other securities) rather than cash in exchange for the target's shares. It is used when the acquirer lacks the liquidity for a cash offer, or wishes target shareholders to participate in the combined entity's future value creation. The exchange ratio — the number of acquirer shares offered per target share — is determined by the relative valuations of both companies and is subject to independent expert review to confirm fairness.

‍

Example: a French industrial company (CHF 45 share price, EV/EBITDA 7.2x) launches a share exchange offer for a Swiss competitor (CHF 28 share price, EV/EBITDA 6.5x). The exchange ratio is fixed at 0.68 acquirer shares for 1 target share, implying a 10% premium to market. An independent expert validates that this ratio is equitable for shareholders of both companies using DCF and comparable methods.

‍

Hectelion determines and validates exchange ratios in share exchange offers, providing independent fairness opinions acceptable to the AMF and COPA.