Sunrise is separated from Liberty and returns to the stock exchange
Published: Friday, Feb 16th 2024, 15:51
Updated At: Friday, Feb 16th 2024, 15:51
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Sunrise is becoming independent again four years after the takeover by Liberty Global. The Americans want to spin off the second-largest Swiss telecoms provider and return it to the SIX Swiss Exchange.
The listing of Sunrise on the Swiss stock market is planned for the second half of the year, Liberty Global announced in a press release on Friday afternoon. However, this is not a classic IPO with a capital increase, but a spin-off.
The new Sunrise shares will be allocated to Liberty Global shareholders. They can then decide for themselves whether they want to remain invested in the Swiss telecoms provider or not. Sunrise will be listed on the SIX Swiss Exchange in two share classes.
With the IPO, Sunrise will be released back into entrepreneurial freedom. The Swiss company will be completely separated operationally from the US cable network giant. Liberty intends to invest 1.5 billion Swiss francs to reduce Sunrise's debt.
The operational business of Sunrise will not be affected by the spin-off, Liberty explained: "Customers, employees, suppliers and other stakeholders can rely on continuity."
Takeover worth billions
Liberty Global acquired Sunrise at the end of 2020 in a CHF 6.8 billion takeover and subsequently merged it with its own cable network operator UPC. This created a more potent challenger to the top dog Swisscom, which gained more customers and market share.
One aim of the merger was also to eliminate the respective weak points. Sunrise was given its own landline network, while UPC was given a mobile network. Following the merger of the two companies, Sunrise was delisted from the Swiss stock exchange by Liberty in spring 2021.
Several failed relationship attempts
However, there have been many U-turns on the way to becoming the more powerful number two behind Swisscom: In fall 2019, Sunrise wanted to buy the Liberty subsidiary UPC. However, the takeover failed due to resistance from Sunrise shareholders led by the major shareholder at the time, Freenet. Liberty then wanted to buy the Swiss mobile operator Salt, but this was not successful.
After the two failed attempts at rapprochement, Salt and Sunrise subsequently joined forces in order to obtain their own fixed network so that they no longer had to rent lines from Swisscom or the electricity suppliers. Both founded the joint venture Swiss Open Fiber in mid-May to lay 1.5 million new fiber optic lines to households (FTTH). A total of CHF 3 billion was to be invested in the expansion.
This project was then also abandoned when Liberty announced the takeover of Sunrise.
Exploit full potential
With the release into independence, shareholders could benefit from Sunrise's full potential, Liberty wrote on (today's) Friday. Switzerland's number two has returned to growth after a loss of momentum in the final quarter of 2023.
Overall, Sunrise kept sales stable at CHF 3.035 billion in 2023 (-0.2%). In operational terms - measured by segment-adjusted operating profit (EBITDA) - Sunrise earned CHF 1.031 billion, which is 2.0% less than in the previous year. The loss was reduced thanks to the good final quarter.
"We are delighted that we will be listed on the Swiss stock exchange again," explained Sunrise CEO André Krause. This will enable Swiss investors to participate in the company's strengthened market position as a challenger in the local telecoms market."
Following the successful integration and synergies from the merger with UPC, Sunrise has a very good free cash flow profile and intends to offer an attractive shareholder return. Further details will be announced at a capital markets day later this year, Krause said.
Sunrise expects a slightly higher result for the current year: With largely stable sales, stable to low growth in segment-adjusted EBITDA is expected, Sunrise continued.
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