BUSINESS
3:18 AM PDT 8/12/2020
due to
Georg Szalai
The offer of all-cash tender for the no. 2 Swiss telecom company is part of John Malone’s international cable company to make “converged, national champions” across European markets.
International cable giant John Malone Liberty Global said on Wednesday it had agreed to make a public tender for all-cash for all shares of Swiss pay-TV and telecom company Sunrise Communications in a deal worth 6.8 billion Swiss francs ($ 7 , 4 billion).
The price tag puts a premium of 32 percent on the no. 2 Average share price of Swiss telecom company over the past 60 days.
Last year, Sunrise tried to buy the Swiss cable company UPC from Liberty Global, but Sunrise’s largest shareholder, Germany’s Freenet, which has a 24 percent stake, and activist investors opposed the deal. Freenet has “made a binding, unintentional commitment to offer its shares at the offer price,” Liberty Global said.
The deal “will create the leading national convergent challenger in Switzerland,” Liberty Global said. “Together, the combined company would have 3.1 billion Swiss francs ($ 3.4 billion) in revenue, 2.1 million mobile post-paid subscribers, 1.2 million broadband subscribers and 1.3 million TV subscribers, and amounts to about 30 percent market share in each segment.
The company estimated 3.1 billion Swiss francs ($ 3.4 billion) in total synergies, led by cost and capital expenditure energies.
The submission of the tender is expected to begin in early August, with the conclusion close following regulatory approvals, which the parties expect to receive by the end of the year. Following the successful completion of the offering, Liberty Global said it plans to initiate a so-called “squeeze-out” procedure to force any remaining small shareholders to sell their stake in Sunrise and then exempt Sunrise from trading on ‘ e Swiss stock exchange SIX.
“The transaction is consistent with Liberty Global’s strategy to make converted, national champions across its entire European markets,” the company said.
Said Mike Fries, CEO of Liberty Global: “The industrial logic of this merger is unintentional, but the real winners are Swiss consumers and businesses. This powerful combination of 5G wireless and gigabit broadband will accelerate digital investment in a time when connectivity has never been more essential. “
He added: “This transaction is another important step on our path to becoming champions of fixed mobile in all our core markets, crystallizing the value of our superior broadband networks and supporting long-term, sustainable growth of free cash flow.”
