Despite new financing offer from Liberty, freenet aims to block Sunrise’s UPC bid

15 Oct 2019

Swiss full-service operator Sunrise’s bid to purchase cableco UPC Switzerland from Liberty Global continues to be opposed by Sunrise’s largest shareholder freenet, despite a new offer by Liberty to buy up to CHF500 million (USD501.6 million) of newly issued Sunrise shares to help finance the takeover, Reuters reports. Sunrise and Liberty announced in February that UPC would be sold for CHF6.3 billion including CHF3.6 billion debt, which German telco freenet maintains is too expensive, despite Sunrise subsequently revising its financing plans to appease shareholders (including cutting its planned rights issue from CHF4.1 billion to CHF2.8 billion and raising dividends) and the latest announcement from Liberty. Sunrise investors will vote on the rights issue on 23 October.

freenet – which owns nearly a quarter of Sunrise shares – argued: ‘The participation of Liberty Global changes nothing in our opinion or that of the majority of shareholders about the deal. We still think that it is not a good deal. Liberty Global has merely said it will participate at rock bottom prices with the money they will receive from a too expensive sale.’

Sunrise welcomed the Liberty offer in a press release, stating: ‘Sunrise and Liberty Global have entered into a conditional rights purchase agreement pursuant to which Liberty Global will invest up to CHF500 million in a combination of Sunrise tradable rights and subsequent subscription of newly issued shares. Sunrise will provide Liberty Global with the right to propose a representative for election to the Sunrise Board of Directors at the next AGM [in April 2020] if Liberty Global achieves a shareholding above 5%.’ The release added: ‘Sunrise is convinced of the enormous strategic importance of the acquisition of UPC Switzerland, which will significantly benefit Swiss consumers and businesses. The transaction will position Sunrise as the leading fully-integrated challenger in the Swiss telecommunications market, creating a stronger and more valuable company for shareholders.’

Switzerland, freenet, Liberty Global (incl. LGI), Sunrise Communications, UPC Switzerland