The planned takeover of Swiss cable operator UPC by Sunrise has finally failed. The Swiss telecommunications company has terminated the share purchase agreement with UPC parent company Liberty Global.
The cancellation triggers the payment of a penalty of CHF50 million (€46 million) to Liberty Global. Sunrise expects total additional costs of CHF70-75 million related to the transaction, consisting of underwriting fees (CHF19 million) advisory and legal fees, as well as already incurred integration costs (CHF24 million).
The planned acquisition of UPC Switzerland agreed in February 2019 failed due to opposition from Sunrise shareholders, in particular its largest single shareholder Freenet, who rejected the terms agreed with Liberty Global.
Liberty Global notes the termination received from Sunrise, but remains open for the renegotiation of a transaction. “While we would have preferred to keep the current share purchase agreement in place, we understand this move by Sunrise,” said Mike Fries, CEO of Liberty Global.
“The Sunrise board has been navigating a difficult situation. We look forward to continuing our conversations with either the board or Freenet about a potential transaction that creates significant value for both sets of shareholders and Swiss consumers,” added Fries. “There is no question that UPC remains the fulcrum player in Switzerland’s converging telecom market.”
UPC Switzerland now wants to pursue its business as a stand-alone company. “UPC continues to implement its growth plan, investing in the further development of its products and in the expansion of its high-performance cable network infrastructure,” said CEO Severina Pascu.
“We are very proud of the strong results UPC has achieved over the last months: in the last quarter, our net adds were positive again. During the last year we have delivered a stunning array of innovations – from the new UPC TV experience, which is very popular with our customers, to the unlimited mobile portfolio. And just recently, we launched Gigabit internet speed across the entire UPC footprint, thereby making a significant contribution to the digitisation of Switzerland,” added Pascu.
“UPC is continuing to invest strongly in the digitisation and simplification of processes and systems. These accomplishments prove that we are successfully implementing our growth plan and we will now continue to build on these achievements,” stressed Pascu.
