Sunrise shareholders reject giant Swiss telecoms deal

Swiss communications firm Sunrise said Tuesday that it does not have enough shareholder support to acquire cable operator UPC Switzerland, quashing what would have been one of Europe’s largest takeovers.

Sunrise had scheduled a meeting of shareholders for Wednesday to approve the 2.8 billion Swiss franc ($2.8 billion, 2.5 billion euro) capital increase required to partly fund the purchase.

But it cancelled the event after it became clear that a majority of shareholders who intended to vote would not support the move, according a Sunrise statement.

UPC Switzerland’s parent company Liberty Media is one of the world’s largest communications companies. Its chairman John Malone, an American billionaire, earned the nickname “cable cowboy” due to his propensity for aggressive media deals.

By acquiring UPC Switzerland, Sunrise had hoped to forge a firm capable of rivalling market leader Swisscom.

Sunrise intially planned to fund the $6.4 billion purchase through a combination of debt and a $4.2 billion capital increase.

But Sunrise’s largest shareholder Freenet immediately sounded the alarm, raising concerns about the size of the capital increase and the risk that Sunrise would be paying top dollar for cable technology that might be threatened by 5G networks.

Sunrise revised the capital increase plan down to $2.8 billion, but Freenet, a German telecommunications firm, remained unconvinced.

Sunrise board chairman Peter Kurer said in a statement that the company continued “to believe in the compelling strategic and financial rationale of the acquisition”.

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