Sunrise Board of Directors to recommend Liberty Global’s cash offer for all Sunrise shares for CHF110 per share Mittwoch, 12. August 2020 - 06:45

Sunrise Communications Group AG (“Sunrise”) today announced that Liberty Global plc (“Liberty Global”) has published the pre-announcement for its public tender offer to acquire the company at an enterprise value of CHF6.8bn2. The offer price of CHF110 per share in cash implies a premium of 32% to the 60 day VWAP, 28% to the last trading day prior to this announcement and represents a total shareholder return of c.90%1 since the IPO of Sunrise in 2015. The offer price values Sunrise at a multiple of 10.0x2 LTM Q1-20 adj. EBITDA of CHF 678m.

After careful consideration, the Sunrise Board of Directors has determined that the transaction is in the best interest of Sunrise and its shareholders, and has therefore unanimously resolved that it will recommend the offer for acceptance. As part of the transaction, Freenet AG (“Freenet”) has entered into an undertaking in which it agreed to tender its entire c.24% interest in Sunrise under the offer.

The combination will create a stronger, fully converged nationwide challenger across all elements of the 4 play bundled product, including fiber, cable, TV and mobile. The combined company will have the scale to drive innovation, invest in new services and pursue growth by providing innovative and competitively priced offers. The enlarged new company will also be better positioned to drive competition with direct benefits for the Swiss economy and consumers.

The combined business will be well positioned to continue its next generation network roll-outs, including 5G and future technologies, offering up to 1Gbps speeds to 90% of Swiss households by 2021, with a clear roadmap to enable up to 10Gbps over time. UPC Switzerland’s next generation fixed network with its extensive fibre backbone will further strengthen Sunrise's leadership position in 4G and 5G.

For a summary of the benefits of the combined company for consumers, businesses and Switzerland, please see the microsite www.nationalconnectivitychallenger.ch.

Thomas D Meyer, Chairman of Sunrise Board, said: “In making this offer, Liberty Global is recognizing the quality and resilience of our business and its potential going forward. The Board believes that the offer is in the best interest of our shareholders and will create opportunities for the Sunrise employees to be part of a fully converged national champion. The combination of Sunrise and UPC Switzerland will create the leading fixed-mobile challenger in the Swiss telecoms market, with the scale and infrastructure to compete against Swisscom.”

Andre Krause, CEO of Sunrise, commented: “Sunrise has delivered on its quality- focussed strategy and built one of the best mobile networks worldwide. We have successfully gained market share in all our businesses, underpinned by our strong focus on customer centricity, service excellence, innovation and quality offering. We are very proud of what our employees have achieved and believe that the combination with UPC Switzerland will enable the combined company to become the leading fully converged challenger in the market.”

Closing of the transaction is subject to customary conditions set out in the pre-announcement, including:

• Tender of at least 66 2/3% of the Sunrise shares into the offer
• Receipt of required merger clearance and other approvals
• No Material Adverse Effect by the end of the main acceptance period of the offer (defined as 10% of FY19 adjusted EBITDA, 10% of FY19 consolidated total equity or 7% of FY19 service revenue)

A CHF50m break fee would be payable by Sunrise under certain circumstances including in the event that the Board changes or withdraws its recommendation of the offer. The offer prospectus and the board report in relation thereto will be published in the coming weeks, and the transaction is expected to close around year-end, subject to regulatory approvals.

Sunrise will continue to operate independently during the offer period and will continue to pursue its B2B and consumer initiatives in accordance with its roadmap and strategy. There will be no change for our customers in the interim. After completion of a successful offer, Liberty Global intends to initiate a squeeze-out procedure and delist Sunrise shares from trading on the SIX Swiss Exchange. Sunrise is expected to become a wholly-owned subsidiary within the Liberty Global group of companies.

1 Assumes no dividend re-investment since IPO. Total shareholder return of c.100% assuming dividend re-investment

2 Based on Q1-20 net debt of CHF1.6bn plus CHF0.2bn of dividend paid in April 2020 and diluted securities of 45.4m shares

Advisors

Deutsche Bank is serving as financial advisor and Lenz & Staehelin as legal advisor to Sunrise.

About Sunrise

The Sunrise Communications Group AG (Sunrise; SWX: SRCG) is the leading challenger on the Swiss telecommunications market. Sunrise is the largest non-state-controlled telecommunications company in Switzerland, offering mobile, Internet, TV, and landline services to private and business customers. Sunrise offers the biggest and fastest 5G mobile network in Switzerland (connect magazine 1/2020). Sunrise is the 5G pioneer and was the first provider to introduce 5G in the beginning of April 2019. In July 2020, Sunrise covered already more than 554 cities/towns, offering the largest 5G network (3.5 GHz) in Switzerland and Europe. In addition to this, Sunrise offers the best geographic 4G/LTE coverage across more than 96% of Switzerland to 99.98% of the population. 4G+ coverage is approximately 84.5% of the Swiss population, with speeds of up to 900 Mbit/s. On the fixed side, Sunrise reaches approximately 85% of households in Switzerland with its fully invested network. The company offers the most advanced fiber technologies – such as vectoring, FTTS, FTTB, and FTTH – thanks to its long-term agreement with Swisscom, SFN, and local utilities. Sunrise has around 1,739 employees (full-time equivalents) as well as more than 137 apprentices – the highest share of apprentices (8.9%) in a Swiss-wide company ranking (SonntagsZeitung August 25, 2019).

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. For more information, please visit www.libertyglobal.com.