UPC owner Liberty Global wants to buy Sunrise

Liberty Global is offering CHF 110 per Sunrise share in cash. This is 32 percent more than the average of the last 60 days. The previous day, the share closed at 86.20 francs. Sunrise's board of directors considers the transaction to be in the best interest of Sunrise and its shareholders, and therefore unanimously decided to recommend the offer for acceptance.

Sunrise's major shareholder Freenet has agreed to tender its entire 24.42 percent stake in Sunrise. Following the acquisition, Sunrise is to be delisted from the Swiss stock exchange SIX.

This removes a stumbling block: Freenet had let the planned takeover of UPC by Sunrise fall through last year (Werbewoche.ch reported). Now the wedding takes place after all, just the other way around.

Bigger competitor for Swisscom

The merger will create a larger competitor for industry leader Swisscom, it says. The combined company will be well positioned to continue the roll-out of next-generation network infrastructure, including 5G and future technologies. It aims to provide 90 percent of Swiss households with internet of up to 1 gigabit per second (Gbps) by next year. The goal is to increase speeds to up to 10 Gbit/s over time, he said.

The new company offers significant benefits for consumers and businesses across Switzerland, as well as opportunities for growth, UPC CEO Baptiest Coopmans said in a statement. Competition, innovation and customer choice can be driven, he said. "With Liberty Global's support, we have the critical mass to make a difference in the Swiss market," the UPC CEO said.

No change for customers

The offer is subject to several conditions. At least two thirds of the shares must be tendered and the usual antitrust and other approvals must be obtained. According to current planning, the offer period will run from September 11 to October 8, and the additional acceptance period from October 15 to 28.

A further condition is that there are no material adverse effects by the end of the offer period. Sunrise understands this to mean a reduction of more than 10 percent in adjusted EBITDA or consolidated equity for the previous financial year. Service revenues must also not shrink by 7 percent or more.

In addition, Sunrise would be required to make a penalty payment of CHF 50 million to Liberty Global under certain conditions, in particular if the Sunrise Board of Directors changes or withdraws its recommendation to accept the offer. The transaction is expected to be completed by the end of the year.

Sunrise intends to continue operating independently during the offer period. There will be no changes for customers during this period, it says. (SDA)