Liberty Global Announces CHF 500 Million Conditional Rights Purchase Commitment for Sunrise’s Financing of UPC Switzerland ...
October 14 2019 - 12:49AM
Business Wire
Liberty Global plc (“Liberty Global”) (NASDAQ: LBTYA, LBTYB and
LBTYK) and Sunrise Communications AG (“Sunrise”) today announced an
agreement whereby Liberty Global will support Sunrise’s rights
offering related to the acquisition of UPC Switzerland1.
Liberty Global has agreed to support the Sunrise rights offering
up to an aggregate amount of CHF 500 million2 through the purchase
of tradeable subscription rights at market prices and the
subsequent purchase of newly issued shares, if any, in the rights
offering. If fully utilized, Liberty Global’s resulting ownership
would reach 7.8% at current market prices3. Sunrise and Liberty
Global have also agreed that Liberty Global will receive one board
seat nomination as long as its shareholding exceeds 5%. All other
terms of the CHF 6.3 billion transaction remain unchanged.
“We have always believed in the logic of this combination. It
creates a national powerhouse that will provide a fully-converged
challenger to Swisscom and represents a smart and accretive
transaction for both Sunrise and Liberty shareholders,” said Mike
Fries, CEO of Liberty Global. “We are also happy to support the
financing. Both investors and consumers win when this deal closes.
Olaf and his team are excellent operators and are uniquely
qualified to realize the strategic and financial benefits of the
merger.”
Sunrise shareholders will vote to approve the relevant capital
increase required to consummate the transaction on October 23rd.
The Swiss regulatory authority, WEKO, approved the deal without
conditions, citing the fact that it will create the second largest
telecommunications carrier in Switzerland and that the combination
will stimulate competition. Glass Lewis, Ethos, zRating, three
leading proxy advisory firms, recommended Sunrise shareowners
approve the capital increase.
Separately, ISS issued a flawed report recommending that Sunrise
shareholders vote against the capital increase. While ISS found the
combined entity “could reasonably provide a strategic advantage”
over the near and medium term, it raised unfounded concerns about
the long-term viability of UPC’s fiber-rich HFC networks versus
emerging technologies and, among other errors, misstated both
current and historical transaction multiples.
“ISS demonstrated a surprisingly poor understanding of the
telecom industry in this report,” said Fries. “Fixed-mobile
convergence is the future. Industry leaders, regulators and sector
analysts all agree on that point. European operators have already
completed over €100 billion in transactions just like this one, and
at even higher multiples. Nearly all of these transactions involved
cable networks precisely because our systems are fiber-rich and
future-proof. That’s just one of the many reasons we are so
confident in UPC Switzerland even if this deal does not close.
We’ve already launched gigabit speeds throughout Switzerland as
well as 20 cities across Europe and, unlike telecom incumbents,
have the fastest and most efficient path to 10 gig speeds down the
road.”
ABOUT LIBERTY GLOBAL
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is one of the
world’s leading converged video, broadband and communications
companies, with operations in six European countries under the
consumer brands Virgin Media, Telenet and UPC. We invest in the
infrastructure and digital platforms that empower our customers to
make the most of the digital revolution. Our substantial scale and
commitment to innovation enable us to develop market-leading
products delivered through next-generation networks that connect 11
million customers subscribing to 25 million TV, broadband internet
and telephony services. We also serve 6 million mobile subscribers
and offer WiFi service through millions of access points across our
footprint.
In addition, Liberty Global owns 50% of VodafoneZiggo, a joint
venture in the Netherlands with 4 million customers subscribing to
10 million fixed-line and 5 million mobile services, as well as
significant investments in ITV, All3Media, ITI Neovision,
LionsGate, the Formula E racing series and several regional sports
networks.
IMPORTANT NOTICE
This document is for informational purposes only and does not
constitute an offer to purchase or a solicitation of an offer to
sell any securities of any issuer.
_________________________________________________________
1 Sunrise’s capital increase is expected to be structured as a
rights offering with subscription rights being issued to Sunrise’s
existing shareholders that will entitle holders of those rights to
subscribe for new shares at a discount to be determined by Sunrise
prior to launch. The subscription rights are expected to trade on
the SIX Stock Exchange for a given period. The rights offering is
conditional on approval of a capital increase of Sunrise by Sunrise
shareholders at an extraordinary general meeting scheduled for
October 23.
2 Liberty Global has agreed to acquire subscription rights at
market prices not exceeding the theoretical rights price at launch
of the rights offering. The theoretical rights price will be
calculated following the close of trading in Sunrise shares on
October 22. The obligation of Liberty Global to acquire
subscription rights is subject to certain conditions described
further in the agreement with Sunrise.
3 Based on the Sunrise closing share price on October 11, 2019
of CHF80.25 and a rights offering of CHF2.8 billion.
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version on businesswire.com: https://www.businesswire.com/news/home/20191013005047/en/
For more information, please visit www.libertyglobal.com or
contact:
Investor Relations: Matt Coates +44 20 8483 6333 John Rea
+1 303 220 4238 Stefan Halters +44 20 8483 6211
Corporate Communications: Molly Bruce +1 303 220 4202
Matt Beake +44 20 8483 6428
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