Sunrise: a merger with UPC postponed or abandoned?

Last week Sunrise decided to cancel its extraordinary general meeting because management thought it would not get shareholder approval for the takeover of UPC. It was mainly Sunrise’s main shareholder, Freenet (which holds 24.5% of the shares), who opposed it. The disagreement concerns the price paid (10x UPC’s EBITDA) and how to finance it (by increasing the share capital by CHF 2.8 billion). The owner of UPC, Liberty Global, can now request a new extraordinary meeting until November 11. After this date, Sunrise may request to cancel the purchase, but will have to pay a penalty of CHF 50 million to Liberty Global.