Sunrise shareholder Canada Pension Plan Investment Board backs $2.8 billion capital hike

FILE PHOTO: The logos of Swiss telecom company Sunrise and broadband and telecommunications provider UPC Schweiz are seen at a shop in Zurich, Switzerland October 10, 2019. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Sunrise Communications SCMN.S has won support from one of its largest shareholders for its $2.8 billion capital hike - the latest twist in the telecom company's battle to buy Liberty Global's LBTYA.O Swiss business.

Canada Pension Plan Investment Board, Sunrise’s third biggest investor with a 5% stake according to Refinitiv data, said it will support the fundraising launched to back the 6.3 billion Swiss francs purchase.

Sunrise wants to raise 2.8 billion Swiss francs ($2.8 billion) to finance the purchase of cable operator UPC, but the plan has run into opposition from investors who have said it is overpaying and were concerned Liberty Global was not taking part in the deal.

Sunrise shareholders will vote on the capital increase on Oct. 23, with a Reuters survey showing at least 30% of Sunrise shares, including German group Freenet FNTGn.DE, against the capital hike..

Proxy adviser ISS has recommended shareholders vote against the rights issue. Other proxy advisors Glass Lewis, Ethos, and zRating have recommended Sunrise shareowners approve the capital increase which would pave the way for Switzerland’s biggest telecoms deal.

Liberty Global LBTYA.O on Monday offered to buy up to 500 million Swiss francs ($502.11 million) in newly created Sunrise Communications shares SRCG.S - a move aimed at winning shareholder support for the deal. [L5N26Z0LO]

($1 = 0.9988 Swiss francs)

Reporting by John Revill, Editing by Franklin Paul