UPDATE 2-Sunrise counts cost of its failure to buy Liberty Global business

ZURICH (Reuters) – Sunrise Communications (SRCG.S) said on Wednesday it faces a hit of up to 125 million Swiss francs ($125.39 million) from its failed bid to buy Liberty Global’s (LBTYA.O) Swiss unit, as the U.S. cable company held out hopes a deal could be revived.

FILE PHOTO: Swiss telecom company Sunrise’s logo is seen at an office building in Zurich, Switzerland February 28, 2019. REUTERS/Arnd Wiegmann

Sunrise’s costs from the failed 6.3 billion franc deal, halted after opposition from the Swiss telecommunication company’s biggest shareholder, include a 50 million franc break-up fee to Liberty Global, as well as 19 million francs in underwriting fees and already-incurred integration costs of 24 million francs.

Last month, Sunrise scrapped its takeover of Liberty’s UPC Switzerland business when German firm Freenet (FNTGn.DE), which holds 25% of the Swiss telecommunications group, balked on concerns the move was too expensive.

Freenet said that adding cable assets made little sense as the industry was transitioning to faster 5G mobile technology.

Liberty Global said late on Tuesday it was not completely writing off the transaction and held out hopes that a deal could be resurrected.

“We look forward to continuing our conversations with either the board or Freenet about a potential transaction that creates significant value for both sets of shareholders and Swiss consumers,” Liberty Global said in a statement.

Sunrise also released its third-quarter numbers on Wednesday, with its net income surging 52% to 48 million francs.

Revenue increased 1% to 474 million francs in the period, the Swiss company said, adding that it expects to reach its 2019 targets that include revenue of between 1.86 billion and 1.9 billion francs and earnings before interest, taxes, depreciation and amortization (EBITDA) of 618 million-628 million francs.

Sunrise sees a dividend of 4.35 francs-4.45 francs per share.

($1 = 0.9969 Swiss francs)

Reporting by John Miller, editing by John Revill and Sherry Jacob-Phillips

Leave a Reply