Sunrise announced it would acquire the Swiss cable operator from Liberty Global, but shareholder Freenet objects.
The operator originally stated it would pay CHF6.3 billion (€5.55 billion) for UPC Switzerland, with over half, CHF3.6 billion, in assumed debt to be raised through a rights issues and the rest in cash.
Sunrise is the second largest mobile player, and in last quarter, was on a roll, adding 42,300 post-paid customers net, plus its Internet and TV subscribers rose by 8.3% and 14.1% during the last year.
However, Freenet, which owns a nearly 25% stake in Sunrise, said it would not participate in the rights issue, objecting to Sunrise putting all the risk on existing investors.
Although the UPC network passes 2.3 million – about 60% – of Swiss homes, only 1.1 million of the passed homes are subscribers to UPC’s video services.
Of them, 645,000 are premium and mobile subscriptions amount to 146,000.
Sunrise says the connections could be upgraded to 1Gbps via DOCSIS 3.1. In time, Sunrise says acquiring the network would also enable it to offer 10Gbps and improve enhanced customer experience in regions beyond its fibre deployment.
Freenet is not the only one to be less enthused than Sunrise by the deal, with some financial analysts casting doubt on the CHF 2.8 billion value Sunrise says it would gain in terms of synergies and scale, the better to compete against Switzerland's dominant operator, Swisscom.
Prior to Freenet sticking a spanner in the works, Sunrise said it expected to complete the acquisition by the end of 2019. The deal could still go through without Freenet's support.