Sunrise improves outlook regarding UPC takeover

Thursday, 22. August 2019 09:19

Sunrise Communications AG said on Thursday that it expects a total annual synergy run rate of 280 million francs from the proposed purchase of Liberty Global Plc's UPC Switzerland instead of the initial estimate of 235 million. After analyzing for half a year, the telecommunications system operator improved the expectations in the area of costs and capital expenditure to 230 million Swiss francs by 2023 compared to the previous 190 million by 2022. The announcement from yesterday's meeting refers to criticism by Freenet AG, the biggest shareholder, that the deal worth 6.3 billion Swiss francs isn't appealing.

The net present value of the synergies was lifted to 3.1 billion after integration costs from 2.8 billion francs with more than 60% of the sum for the company's shareholders. "Sunrise views Freenet as guided by its own short-term financial constraints and self-serving objectives which it seeks to solve at the expense of Sunrise and its shareholders. The board proposed to Freenet changes in the capital structure of the Transaction in order to accommodate Freenet's desire to reduce the size of the rights issue while maintaining a prudent capital structure" but it refused, the statement adds and reveals its representatives were removed from the process.

Sunrise has prepared 2.7 billion Swiss francs in cash and agreed to assume 3.6 billion in debt. The plan included a rights issue of 4.1 billion while now it has been trimmed by one billion Swiss francs. The synergy boost can be achieved by one-off integration costs of 230 to 250 million francs, according to the update, compared to the original 140 to 150 million Swiss francs.

Related Links: Liberty Latin America Ltd.freenet AGSunrise Communications Group AG
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Breaking the News / IT