Sun setting on UPC purchase? Sunrise cancels EGM on capital increase

22 Oct 2019

Swiss telco Sunrise has cancelled tomorrow’s scheduled Extraordinary General Meeting (EGM) which was to be held to authorise a CHF2.8 billion (USD2.84 billion) capital increase via a rights offering to help finance the company’s proposed CHF6.3 billion acquisition of UPC Switzerland. Sunrise said in a press release that it was acting on indications from a ‘clear majority’ of shareholders that they would vote against the capital increase at the EGM, following largest stakeholder freenet’s announcement that it opposed the move. The approval of the capital increase was the last condition precedent to closing the acquisition of UPC Switzerland; Sunrise notes that the share purchase agreement between Sunrise and UPC’s owner Liberty Global remains in force unless terminated by either party and has a long stop date of 27 February 2020.

In a separate press release, Liberty Global said it supported Sunrise’s decision to cancel the EGM. It also noted that ‘the existing [UPC Switzerland] share purchase agreement between the parties will remain in place with some minor amendments, including the flexibility to convene a new EGM and certain adjusted termination rights.’ Liberty also noted that its recently announced Conditional Rights Purchase Agreement – an offer by Liberty to buy up to CHF500 million of newly issued Sunrise shares to support the takeover – will lapse and thereby terminate.

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