ZURICH (Reuters) - The Swiss anti-trust authority has approved Sunrise Communications’ (SRCG.S) 6.3 billion Swiss franc ($6.36 billion) takeover of Liberty Global’s (LBTYA.O) UPC business, setting up a showdown between the telecoms company and foes of the deal.
Sunrise — locked in a feud with its largest investor, Germany’s Freenet (FNTGn.DE), which opposes the deal — now plans an extraordinary shareholders meeting on Oct. 23 to vote on a capital increase needed to fund the takeover.
Freenet, which owns a quarter of Sunrise, has been joined by some other investors in fighting the transaction on grounds the price is too high, a proposed 4.1 billion franc capital increase would dilute their holdings and the Swiss company would wind up with all the risks while allowing Liberty Global a lucrative and unfettered exit.
“The Swiss Competition Commission (COMCO) has decided to raise no objections to the acquisition of UPC Switzerland by Sunrise, and has now approved the transaction,” Sunrise said on Thursday. “The approval was granted without any conditions or stipulations being imposed.”
COMCO said it expected the deal to boost competition.
Sunrise has been meeting investors in hopes of convincing them to support the transaction against Freenet’s stiff resistance. Sunrise Chief Executive Olaf Swantee has signaled readiness to modify financing of the deal, although the details are not yet public.
Sunrise said COMCO’s blessing was a “confirmation of its own view that the transaction will give it a significant competitive edge, thereby making it an even stronger competitor” to Switzerland’s dominant communications provider, state-controlled Swisscom (SCMN.S).
Reporting by John Miller; Editing by Michael Shields