ZURICH (Reuters) - Activist investor Active Ownership Capital (AOC) has joined the ranks of shareholders that oppose Sunrise Communications’ (SRCG.S) planned 6.3 billion Swiss franc ($6.36 billion) takeover of Liberty Global’s (LBTYA.O) UPC Swiss cable operator.
“We think the transaction is 2-2.5 billion Swiss francs too expensive. Sunrise should massively renegotiate with Liberty or even better drop the deal,” AOC founding partner Florian Schuhbauer told Reuters in an interview on Thursday.
AOC has a stake of less than 3% in Sunrise via a Luxembourg-based fund.
In two meetings over the past two weeks, AOC was unable to persuade Sunrise management to change its plan substantially, he added.
The deal includes a planned 4.1 billion Swiss franc rights issue that needs majority approval at an extraordinary shareholder meeting to be called once the transaction gets anti-trust clearance.
“We hope and expect that a clear majority will vote against the deal,” Schuhbauer said, noting talks with other shareholders indicated 40-45% of the votes would oppose the deal. That would suffice to block the deal given turnout at shareholder meetings is never 100%.
Given opposition from other shareholders as well, Sunrise has been considering changing the financing mix to rely more on debt. Liberty has ruled out renegotiating the sale price.
Writing by Michael Shields