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Liberty Global rejects changes to Sunrise deal

Liberty Global has rejected making any changes to its agreement with Sunrise for the sale of its Swiss unit following the eruption of hostilities between Sunrise and its biggest shareholder, Germany’s Freenet over the terms of the deal.

Noting the “recent statements” from the pair on the transaction, Liberty said that was “fully committed to completing the transaction as agreed”.

It said that it had not had any discussions over amending the terms of the deal “and has no intention or interest in doing so”.

In its statement, Liberty said it was “pleased with the continued turnaround by UPC Switzerland”.

Sunrise last week accused Freenet board representatives of “a conflict of interest” and resolved to exclude them from discussions about the merger. Sunrise also asserted that Freenet had previously proposed an illegal acquisition of Freenet shares at the expense of minority investors.

Sunrise said it had had offered to make changes in the capital structure of the acquisition to accommodate Freenet’s desire to reduce the size of the rights issue.

The Swiss operator said it had stated its openness to consider an increase in leverage to finance the acquisition, reducing the size of the proposed share rights issue by CHF1 billion (€920 million), but said that this had been rejected by Freenet.

Sunrise also said that Freenet’s push for Liberty Global to retain debt rather than transfer it to Sunrise as part of the deal as “opportunistic and inappropriate” in view of an increased expectation of synergies from the merger of the pair and the standalone value of UPC Switzerland.

Liberty Global agreed in February to sell UPC Switzerland to local operator Sunrise for a total enterprise value of CHF6.3 billion.