The showdown between the supporters and opponents of Sunrise’s takeover of UPC Switzerland will not take place for the time being: The Swiss telecommunications company pulls the emergency brake and, with approval by UPC parent company Liberty Global, cancels the extraordinary general meeting (EGM) scheduled for October 23, 2019.
At the EGM, Sunrise shareholders were to decide on the planned capital increase of CHF2.8 billion. The approval of the capital increase was the last condition to complete the acquisition of UPC.
Based on clear indications received from shareholders and Freenet’s announcement to vote against the capital increase at the EGM, the board of directors of Sunrise has concluded that the clear majority of shareholders who have registered their shares to vote at the EGM do not support the capital increase, according to a Sunrise statement.
“We regret cancelling the EGM. We have spent a significant amount of time engaging with our shareholders and continue to believe in the compelling strategic and financial rationale of the acquisition,” said Peter Kurer, chairman of the board of directors of Sunrise.
Liberty Global recently tried to make the capital increase more attractive to shareholders by participating with CHF500 million and becoming a shareholder of the merged company. Previously, the size of the capital increase had already been reduced from CHF4.1 billion to CHF2.8 billion. Freenet continues to reject the acquisition under the agreed terms.
The further course of the development is unclear. The share purchase agreement has a long stop date of February 27, 2020 and remains in force unless terminated by a party.
While Sunrise CEO Olaf Swantee claims in an interview with Bloomberg that the deal was now “dead”, a Liberty Global spokesman told Broadband TV News that “the existing share purchase agreement remains in place.”
[UPDATE, 15.45 CET] UPC Switzerland wants to continue its business on a stand-alone basis for now. “Regarding the transaction, we have nothing to add to the Liberty Global press release issued this morning,” said CEO Severina Pascu. “UPC Switzerland is a strong company on a stand-alone basis. Our turnaround plan is working, we keep investing in our innovative product portfolio, and our Gigabit network assets continue to have strategic long term value.”
