Liberty Global gets down to business with Switzerland's Sunrise

Publishes offer prospectus. US cable giant, if all goes to plan, will fully own Switzerland's Sunrise by October.

Ken Wieland, contributing editor

August 27, 2020

2 Min Read
Liberty Global gets down to business with Switzerland's Sunrise

Consolidation in Switzerland's telecoms market looks just around the corner.

Cable operator UPC Switzerland, a subsidiary of Liberty Global – set up by US cable pioneer and billionaire wheeler-dealer John Malone – published today its Offer Prospectus for Sunrise Communications Group.

There were no surprises.

The prospectus confirmed the previously announced all-cash tender offer for all publicly held shares of Sunrise, at 110 Swiss Francs (US$121) per share. Sunrise's board of directors had previously, and unanimously, recommended the offer to shareholders.

Germany's Freenet, Sunrise's largest shareholder – holding around 24% of Sunrise's share capital – has already signed a binding, unconditional commitment to tender its shares at the offer price.

The main offer period is expected to commence on September 11 and slated to expire on October 8.

The deal, assuming shareholders play ball, values Sunrise at around $7.4 billion.

Pretty solid Q2
Publication of the Offer Prospect coincided with the announcement of Sunrise's Q2 results.

There were no eye-catching swings among the financial metrics, either upwards or downwards, and the company reiterated its full-year 2020 guidance.

Revenue and adjusted EBITDA are still expected to be between CHF1.84-1.88 billion ($2.02-2.07 billion) and CHF675-690 million ($742-758 million) respectively.

The reason it could stick with the guidance, said Sunrise, was "ongoing gradual roaming recovery and cost containment."

Sunrise CEO André Krause drew attention to market-share gains, however, and talked about "defining the market pace in Q2."

The number of postpaid mobile customers was up 8.1%, year-on-year, thanks mainly to prepaid customers switching plans. Internet and TV subscribers, over the same period, rose by 6.8% and 12.9% respectively.

Service revenue decreased slightly by 0.6%, year-on-year, to CHF381 million ($419 million). Customer growth largely compensated for lower roaming revenues caused by COVID-19 lockdown restrictions.

Gross profit slipped 1.3%, to CHF307 million ($337 million). Not only because of the service revenue dip, but also a slight contraction in the service gross margin related to roaming and termination rates.

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— Ken Wieland, contributing editor, special to Light Reading

About the Author(s)

Ken Wieland

contributing editor

Ken Wieland has been a telecoms journalist and editor for more than 15 years. That includes an eight-year stint as editor of Telecommunications magazine (international edition), three years as editor of Asian Communications, and nearly two years at Informa Telecoms & Media, specialising in mobile broadband. As a freelance telecoms writer Ken has written various industry reports for The Economist Group.

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