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Liberty Global Holds Firm on Sunrise Deal

Jeff Baumgartner
8/28/2019

Liberty Global and Germany's Freenet are in a stare-down in Switzerland, and Liberty Global isn't about to blink.

Liberty Global said it's standing firm on its proposed deal to sell its Swiss operations to Sunrise for $6.5 billion even as Freenet, Sunrise's biggest backer, continues to balk at the terms.

"Liberty Global is fully committed to completing the transaction as agreed," Liberty Global said in a statement. "The company has not had any discussions regarding amending the binding transaction terms, and has no intention or interest in doing so. We are pleased with the continued turnaround by UPC Switzerland, as demonstrated in our recently published earnings announcement."

There are signs of improvement at UPC Switzerland. In Q2, Liberty Global shed 28,000 revenue generating units (RGUs) there, improving on a loss of 54,000 RGUs in the year-ago quarter. UPC Switzerland also added 14,000 mobile subs, thanks in part to a "revamped" mobile offer after an MVNO switch in January 2019. However, revenues for Liberty Global in the region still fell 5.2%.

Liberty Global's steadfast position on the transaction comes soon after Freenet, which holds an almost 25% stake in Sunrise, voted against the deal, calling it "unfavorable" for all Sunrise shareholders and arguing that the proposed price for UPC Switzerland is too high.

Last week, Sunrise said its board had reviewed Freenet's intention to vote against the rights issue related to the deal, and reiterated its "firm conviction" that the acquisition of UPC Switzerland will create a "stronger and more valuable Sunrise." Freenet's concerns "are neither justified nor in the best interest of Sunrise and all its shareholders," and Freenet's views are "guided by its own short-term financial constraints and self-serving objectives," Sunrise added.

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— Jeff Baumgartner, Senior Editor, Light Reading

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