Sunrise depositary receipts with strong price gains on the Nasdaq
Published: Thursday, Nov 14th 2024, 18:30
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Shortly before Sunrise's IPO in Switzerland on Friday (tomorrow), the US depositary receipts (ADS) of the telecommunications group have already shown significant price gains in trading in the USA. On Thursday afternoon, Sunrise ADSs rose 5.9 percent to 47.86 dollars on the US stock exchange Nasdaq.
Following the spin-off from its British-American parent company Liberty Global, Sunrise intends to return to the Swiss stock exchange SIX on Friday (tomorrow) after an absence of four years. At the current price in the USA, Sunrise would have a market capitalization of 3.4 billion dollars. This would be one of the largest IPOs worldwide this year.
Only the IPOs of Lineage in the USA (5.1 billion dollars) and the Midea Group in China (4.0 billion dollars) were larger. In Switzerland, this would put Sunrise well ahead of Galderma, whose IPO in March amounted to just under CHF 2.3 billion.
However, Sunrise is not a classic IPO with a capital increase, but a spin-off. The existing Liberty shareholders will receive Sunrise ADSs, which have been traded on Nasdaq since (yesterday) Wednesday.
Liberty shareholders can now either sell their ADSs on the Nasdaq or exchange them for Sunrise shares. Each ADS entitles the holder to one share in the Swiss telecoms company. Or investors who have not yet invested in Liberty Global can use the ADSs to buy into Sunrise before the telecom provider's shares start trading on the local stock exchange.
The ADSs are only transitional securities. They will only be traded on the Nasdaq for around nine months. The exact date will be determined by the Sunrise Board of Directors, Liberty Global explained. If the Sunrise ADSs are exchanged for Swiss Sunrise shares within three months, no fees will be charged.
One Sunrise share for 5 Liberty shares
The procedure is complicated because Liberty Global has three share classes. Sunrise will also have two classes of shares. Existing Liberty shareholders will receive one A share in Sunrise for five shares in Liberty Global.
The A shares of Sunrise will be listed on the Swiss Stock Exchange. They are expected to be included in the broad stock market index SPI five trading days after the listing.
There is also a second class B share with ten times the voting power. This remains largely in the hands of Liberty bosses John Malone and Mike Fries, who thus hold a good quarter of the Swiss group.
The Sunrise B shares would not be listed on the stock exchange. They would only be traded over the counter. Holders of these B shares can exchange their shares for Sunrise A shares at a ratio of 1:10.
Entrepreneurial freedom
With the IPO, Sunrise will be released back into entrepreneurial freedom. The Swiss company will be operationally separated from the US cable network giant. Liberty is investing CHF 1.2 billion to reduce Sunrise's debt.
Sunrise will not completely separate itself from the parent company in the future. Business relationships will remain in place. "Thanks to various service agreements, Sunrise will continue to benefit from the partnership with Liberty Global," it was stated at the Capital Markets Day in September.
©Keystone/SDA
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