The UPC purchase by Sunrise suddenly stands on shaky ground
Freenet, the major Sunrise shareholder, is against a takeover of UPC. It intends to vote against the acquisition at the Extraordinary General Meeting.
In February 2019, it became known: Sunrise wants to take over UPC (Werbewoche.ch reported). The purchase price: 6.3 billion Swiss francs. The announced major merger aroused the interest of the Competition Commission (Comco), which decided in June to examine the takeover in greater depth. (Werbewoche.ch reported).
That this might not be the only stumbling block for the new telecom major was reported by the Handelszeitung as early as the beginning of July: the newspaper published that the purchase decision was made against the will of Sunrise's main owner Freenet (Werbewoche.ch reported). "On February 27, as Freenet's representative on the board of directors, I voted against the planned takeover," Freenet CEO Christoph Vilanek said at the time. The German telecom provider holds around a quarter of all Sunrise shares.
Now Vilanek is doubling down and mobilizing against the merger. The purchase price is too high and to the detriment of all Sunrise shareholders, the Freenet CEO told the AWP news agency on Friday. Therefore, Freenet will vote in the fall against the planned acquisition, respectively against the necessary capital increase of 4.1 billion to finance the purchase. Previously, it had been left open how it would vote, as Vilanek wanted to wait for UPC's half-year results first.
How the Switzerland at the weekend Freenet could thus derail the deal. Although the 24.5 percent shareholding is not enough to overturn the proposal, the Sunrise owner would have massive power in the vote, as never all shareholders would come to the general meeting. In other words, the actual quarter could quickly become half or more on the spot.
On Friday, Sunrise commented on the Freenet statement. In a statement, the company wrote that it had "taken note" of the announcement. "Sunrise remains convinced that the acquisition of UPC Switzerland will create a stronger and more valuable Sunrise that benefits from a compelling strategic rationale," it added. Otherwise, Sunrise was tight-lipped. It will provide information on the acquisition of UPC Switzerland when it publishes its figures for the second quarter of 2019.
