Exhibit 99.7
Public Exchange Offer
On deposit as of …… October 2014
Number/Nominal Security description
REG. SHS UBS AG
ZURICH AND BASEL CHF 0.10
UBS proposes to its shareholders to establish a new holding company, UBS Group AG, Zurich (“UBS Group” or the “Group”). To implement this proposal, UBS Group, currently a wholly owned subsidiary of UBS AG (“UBS”), is offering to acquire any and all issued UBS shares in exchange for UBS Group shares on the basis of a 1:1 exchange ratio.
If the Exchange Offer is successful, UBS Group will become the new listed parent company of UBS, which is currently both the ultimate parent company and the primary operating entity of the Group. Assuming that 100% UBS shares are tendered in this Exchange Offer, the consummation of the Exchange of the Offer will, on a consolidated basis, have no material effect on the financial condition of the Group. The Exchange Offer will not involve any change to UBS’s current board of directors and senior management. UBS Group will initiate the delisting of the UBS shares from the SIX Swiss Exchange and the New York Stock Exchange (“NYSE”) as soon as practicable after consummation of the Exchange Offer.
The establishment of a group holding company is intended, along with other measures the Group has already announced, to substantially improve the resolvability of the Group in response to Swiss “too-big-to-fail” requirements and applicable requirements in other countries in which the Group operates. The Group anticipates that these measures will allow the Group to qualify for a capital rebate under the Swiss “too-big-to-fail” requirements. This rebate would result in lower capital requirements for the Group.
As shareholder you have the possibility to tender your UBS shares under the exchange offer on the following basis:
| Exchange ratio: | 1 registered share of UBS Group with a nominal value of CHF 0.10 | |
| (SN 24476758) | ||
| for | ||
| 1 existing registered share of UBS with a nominal value of CHF 0.10 | ||
| Initial acceptance period: | The initial acceptance period will begin on 14 October and is expected to end on 11 November 2014, unless extended. | |
| Additional acceptance period: | Expected from 17 November to 1st December 2014 | |
| Settlement: | First settlement: expected on 19 November 2014: Delivery of UBS Group shares for the UBS shares tendered during the initial acceptance period. | |
| Second settlement: | Expected on 9 December 2014: Delivery of UBS Group shares for the UBS shares tendered during the additional acceptance period. | |
| Tendered shares: | The tendered shares will be assigned the Swiss Security Number 24770431 and will be traded on a separate trading line at the SIX Swiss Exchange. | |
| UBS Group shares: | The UBS Group shares will be granted the same voting and economic rights as the UBS shares. UBS Group has applied for all of the UBS Group shares to be listed and admitted to trading on the SIX Swiss Exchange. UBS Group will also apply for admission of the UBS Group shares on the NYSE. The listing and the first day of trading of the UBS Group shares on the SIX Swiss Exchange (SMI and SPI) and on the NYSE are expected on 19 November 2014. | |
| SESTA squeeze-out and squeeze-out merger: | UBS Group intends to apply for the cancellation (squeeze-out) of the non-tendered UBS shares pursuant to Art. 33 SESTA if it acquires more than 98% of the total UBS shares in issue in the Exchange Offer or within three months after expiration of the additional acceptance period. | |
| If UBS Group holds between 90% and 98% of the total UBS shares in issue, it expects to merge UBS into a merger subsidiary of UBS Group (squeeze-out merger). UBS Group currently intends that the consideration in the squeeze-out merger will consist exclusively of UBS Group shares at the exchange ratio of 1:1. | ||
| Conditions: | The offer is subject, among other things, to the following conditions: | |
| - UBS Group has received valid acceptances to tender shares by expiry of the tender period (as may be extended) for such number of shares so that UBS Group holds at least 90% of all UBS shares in issue at the expiration of the initial acceptance period. | ||
| - The SIX Swiss Exchange has approved the listing and admission to trading of the UBS Group shares and the NYSE has approved the listing of the UBS Group shares, subject to notice of issuance. | ||
| - No decision or judgment has been pronounced that will prohibit the offer to become effective. | ||
| Recommendation: | The Board of Directors of UBS recommends that shareholders tender their shares under the exchange offer. | |
| Tax consequences: | See the “Material Tax Considerations” section of the Offer Prospectus. | |
| Offer Documents: | Persons resident or physically located in the United States should refer only to the U.S. offer documentation, including UBS Group AG’s registration statement on Form F-4 and the U.S. exchange offer/prospectus (the “Offer Prospectus”), which have been filed with the SEC. These documents may be obtained free of charge from the SEC’s website (www.sec.gov) and from Georgeson, the UBS infor- mation agent in the United States. Requests for such copies should be directed to the information agent toll free at +1 (888) 613- 9817 or by email at UBSinfoagent@georgeson.com. | |
| Quotations: | UBS registered share: CHF xx.xx (.. October 2014) UBS Group registered share: no price available yet | |
This letter is intended to provide an overview of some of the terms of the Offer and how you should proceed should you wish to accept it. You are urged to read the Offer Documents mentioned above.
If you wish to tender your shares under the exchange offer during the initial acceptance period, please sign and return to us the enclosed order form. If we do not receive your instructions by 7 November 2014, 05.00 p.m. , we shall take no action on your holding during the initial acceptance period. You will also have the possibility to tender your shares during the additional acceptance period, when you are again notified of the offer.
Yours very truly
UBS AG
Public exchange offer
Please reply by 7 November 2014, 5.00 p.m.
(Receipt date for orders at UBS)
You hold in safekeeping account for me/us as of …. October 2014:
Number/Nominal Security description
REG. SHS UBS AG
ZURICH AND BASEL CHF 0.10
With reference to your letter I/we ask you to execute the following instruction:
X tender my/our UBS registered shares under the Public Exchange Offer.
ATTENTION: Any pending stock exchange orders with limits have to be cancelled before giving instructions for exchange.
X do NOT tender my/our UBS registered shares under the Public Exchange Offer.
Please indicate your choice clearly.
Date: Signature:
