Sunrise announces enhanced transaction structure with a significantly reduced rights issue size of CHF2.8bn for the acquisition of UPC Switzerland

Press release







Opfikon, 30 September 2019; 6:45 a.m. CET

Sunrise announces enhanced transaction structure with a significantly reduced rights issue size of CHF2.8bn for the acquisition of UPC Switzerland

  • Transaction creates the leading fully-integrated nationwide challenger with significant benefits for Swiss consumers and businesses
  • CHF2.8bn rights issue, substantially reduced by CHF1.3bn
  • CHF3.1bn1 net present value of clearly identified in-market cost, capex and revenue synergies
  • Extraordinary General Meeting ("EGM") to be held on 23 October 2019
  • An investor call will be held today, 30 September 2019, 10:30 a.m. CET

Following extensive discussions with its shareholders, Sunrise is pleased to announce an enhanced transaction structure for the acquisition of Swiss cable operator UPC Switzerland, a wholly-owned subsidiary of Liberty Global, incorporating a reduced rights issue to finance the transaction:


1. Size of rights issue significantly reduced by CHF1.3 billion to CHF2.8 billion (expected gross proceeds)


2. Improved eFCF accretion, with equity FCF/share accretion broadly doubling due to revised transaction terms (year 1 before integration costs and including run-rate synergies)


3. Sunrise is committed to maintaining a prudent capital structure with a clear deleveraging path and retaining its existing progressive dividend policy. At the 2020 annual general meeting ("AGM") the Board of Directors will propose:

  • An increased absolute dividend amount in the range of CHF350-370 million for the FY2019 dividend based on the higher expected number of shares post rights issue, with 4-6% dividend per share (“DPS”) annual growth guidance thereafter
  • A cash-or-title-option ("COTO"), pursuant to which shareholders will be given a choice to receive the FY2019 DPS in cash, in newly issued Sunrise shares or a combination thereof. Through the COTO, shareholders can avoid the recycling of proceeds from the capital increase for the FY2019 DPS and participate in Sunrise's future growth at favourable terms, while Sunrise accelerates its deleveraging profile
  • Subject to annual approval by the shareholders at the AGM, Sunrise will consider the application of the COTO in future years


4. As a result of the reduced rights issue size, Sunrise's leverage will increase to approx. 3.6x Jun-19 net debt / LTM EBITDA including run-rate cost synergies or 4.2x reported leverage excluding synergies (excl. IFRS 16 impact)2

  • Including the deleveraging benefit of the COTO, the 4.2x reported leverage is equivalent to 4.0x (assuming 50% of shareholders opt to take the FY2019 DPS in Sunrise shares)
  • Sunrise has a clear deleveraging path, supported by the clearly identified, in-market synergies and strong cash flow generation of the combined business. Sunrise expects a reported leverage below 3x post achieving the run-rate synergies and targets a leverage below 2.5x thereafter


5. Sunrise welcomes the 26 September 2019 decision of the Swiss Competition Commission ("WEKO") to approve the transaction without any conditions or stipulations being imposed


6. The Extraordinary General Meeting (EGM) will be held on 23 October 2019 in order to seek approval for the ordinary capital increase required for the CHF2.8 billion rights offering. Please see today's investor information and the invitation to the EGM published on Sunrise's website for further details



Statements from Sunrise's CEO and chairman


Olaf Swantee, CEO of Sunrise said:


"Since the announcement of the transaction, we have met with more than 200 investors and received strong support on the strategic and industrial logic of the acquisition. Today's enhancements to the initially proposed terms reflect the feedback from our shareholders. Following receipt of WEKO approval last week, we are now looking forward to moving swiftly towards completion of the transaction and to creating a stronger and more valuable fully-converged Swiss telecommunications leader for our shareholders." 


Peter Kurer, Chairman of the Board of Directors of Sunrise added:


"The Board is pleased to announce these enhanced transaction terms which are the result of constructive engagement with our shareholders. We are confident that today's announcement will enable a successful conclusion of the acquisition of UPC Switzerland, which we believe will create a stronger and more valuable Sunrise for all of our shareholders, benefitting from the compelling strategic and financial rationale of the combination. We have full confidence in management's ability to successfully integrate UPC Switzerland and realize the significant expected synergies from the combination for all Sunrise stakeholders."



WEKO approval


Sunrise welcomes the decision by the WEKO dated 26 September 2019 to approve the transaction without any conditions or stipulations being imposed.





Sunrise intends to finance the enterprise value of CHF6.3 billion through a combination of newly raised equity capital and the assumption of the target group's outstanding senior notes and senior secured credit facilities. As announced on 27 February 2019, Sunrise will assume all of the target group's then outstanding senior notes and senior secured credit facilities (relating to the outstanding senior secured notes issued by UPCB Finance IV Limited and UPCB Finance VII Limited) with an aggregate principal amount of approx. CHF3.6 billion, resulting in a residual cash payment from Sunrise to Liberty Global of approx. CHF2.7 billion (subject to a customary closing adjustment mechanism).


Sunrise intends to raise gross proceeds of no more than CHF2.8 billion in the capital increase conducted by way of a rights issue which has been fully underwritten, subject to a resolution by the EGM and customary conditions, by a banking syndicate led by Deutsche Bank and UBS as Joint Global Coordinators and Joint Bookrunners and Morgan Stanley as Joint Bookrunner. The syndicate will also include Credit Suisse and Goldman Sachs International  as Joint Bookrunners. The proceeds of the rights issue will be used to fund the cash payment to Liberty Global of approx. CHF2.7 billion and pay part of the estimated transaction costs of approx. CHF0.2 billion. As soon as reasonably practicable on or after the completion of the transaction, Sunrise also intends to fully redeem its CHF200 million 1.5% senior secured notes due 2024 with the net proceeds received from an upsizing of its CHF1.4 billion existing term loan facility by CHF 300 million.



Timetable to closing


The acquisition of UPC Switzerland is expected to close by the end of November 2019 and remains subject to completion of the rights issue.






30 September 2019

Publication of EGM invitation on the website of Sunrise


30 September 2019

Publication of Shareholder Information Document


1 October 2019

Publication of EGM invitation in official gazette (Schweizerisches Handelsamtsblatt)


2 October 2019

Dispatch of EGM invitation to shareholders by mail


23 October 2019



24 October 2019

Publication of rights issue prospectus


29 October 2019

Cut-off date for determination entitlement to subscription rights


30 October 2019

Beginning of rights trading and rights exercise period


5 November 2019

End of rights trading period (17:30 CET)


7 November 2019

End of rights exercise period (12:00 CET)


11 November 2019

First trading day of newly issued shares


End of November 2019

Transaction expected to close





Investor and analyst call


An investor and analyst call will be held today, 30 September 2019, 10:30 a.m. CET. Details can be found on



1 These include cost and capital expenditure synergies with an estimated annual run-rate of approximately CHF230 million to be achieved by 2023 and revenue synergies with an estimated annual run-rate of approximately CHF50 million to be achieved by 2023. Net present value post integration costs

2 IFRS 16 adjustments increase pro-forma reported leverage by up to 0.1x