Sunrise faces call to remove chairman as takeover fight grinds on

ZURICH/FRANKFURT (Reuters) - Sunrise Communications SRCG.S is facing a call to remove its chairman and another board member, it said on Tuesday, as the Swiss telecommunications company fights to save its planned $6.4 billion takeover of Liberty Global's LBTYA.O Swiss assets.

FILE PHOTO: Peter Kurer, Chairman of Swiss telecom company Sunrise, addresses the annual shareholder meeting in Zurich, Switzerland April 10, 2019. REUTERS/Arnd Wiegmann

At the request of an unidentified shareholder, funds group Axxion AXXION.SN asked the company to add the removal of Chairman Peter Kurer and board member Jesper Ovesen to the agenda of an extraordinary general shareholders meeting, whose date is still to be set.

Sunrise said it would review Axxion’s proposal.

The move came as a person familiar with the matter said German activist investor Active Ownership Capital (AOC) had taken a small stake in Sunrise.

The source said AOC is set to take a critical view of Sunrise’s plan to buy Liberty Global’s Swiss cable operator UPC, but was not the investor seeking to oust Kurer.

Top Sunrise shareholder Freenet FNTGn.DE and at least two other big investors oppose the 6.3 billion Swiss franc ($6.35 billion) proposal to buy UPC Switzerland, which includes a plan to issue new shares to help fund the deal.

It was not immediately clear who was behind the request to have the Sunrise board members removed. A Sunrise spokeswoman said Axxion was likely acting on behalf of a hedge fund, but Axxion declined further comment.

The chilly relationship between Freenet and Sunrise had prompted the Swiss group to exclude Freenet’s two representatives from board discussions of the UPC transaction.

This triggered speculation that Freenet could be behind the request to remove Kurer, but a Freenet spokeswoman denied this and said the German company was not aware who the actor was.

Sunrise shares rose as much as 2.9% on news that AOC had entered the picture, and closed up 2.3%. AOC had helped put together a revolt against the board of German generics group Stada.

Sunrise has been battling to salvage the UPC deal, for which it plans a 4.1 billion Swiss franc rights issue being arranged by UBS UBSG.S and Deutsche Bank DBKGn.DE.

The company said it had also mandated Credit Suisse CSGN.S and Goldman Sachs GS.N to support the deal.

Reporting by Oliver Hirt, Angelika Gruber and John Miller in Zurich and Arno Schuetze in Frankfurt; Editing by John Revill and Jan Harvey