The acquisition of UPC Switzerland by Sunrise is unlikely to go ahead. Liberty Global said in a statement that it supports the decision of Sunrise to cancel the extraordinary general meeting scheduled for 23 October.
The meeting was cancelled after Sunrise reviewed the vote tally, acknowledging that the approval of the capital increase to finance the acquisition of UPC Switzerland had little chance to pass.
UPC Switzerland said it will continue to operate 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,” the company said in a statement.
For the CEO of Sunrise, Olaf Swantee, the deal is officially “dead”, Bloomberg reports. The company does not intend to continue to negotiate with Liberty Global, he told the news agency awp Finanznachrichten. Sunrise has a very strong stand-alone strategy, too, and it "will continue to implement it”, the CEO said.
Swantee added that it is “disappointing” for Sunrise to not be able to implement the synergies with UPC, build its own internet infrastructure and double the customer base in one swoop through the acquisition. However, it has a “very strong position in all market segments."
The purchase agreement remains in place, with some minor amendments, including the flexibility to convene a new EGM and certain adjusted termination rights, Liberty Global said. The company it is still examining its options under the agreement, but its previous offer of participating in Sunrise's capital increase has been ended.
Sunrise has tried to convince its shareholders to support the deal by reducing the amount of the capital increase from CHF 4.1 billion to CHF 2.8 billion, but the major shareholder Freenet continues to oppose the transaction, saying the price for UPC is too high. Other shareholders also have expressed concerns about the merits of the deal.
