Liberty Global Ltd 8-K, filed Aug 13, 2020
Liberty Global Ltd. (LBTYA)
8-K
2020-08-13
For: 2020-08-11
View Original
Added on
April 09, 2026
About this 8-K
Liberty Global Ltd filed this 8-K on August 13, 2020, reporting on events of August 11, 2020.
Items reported
- Item 1.01: Entered into a material agreement
- Item 7.01: Regulation FD disclosure
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): August 11, 2020
(Exact Name of Registrant as Specified in Charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification #) | ||
(Address of Principal Executive Office)
+44 .208 .483.6449 or 303.220.6600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement
On August 12, 2020, Liberty Global plc (“Liberty Global”) and Sunrise Communications Group AG, a Swiss corporation (Aktiengesellschaft) whose shares are listed on the SIX Swiss Exchange (“Sunrise”), entered into a transaction agreement (the “Transaction Agreement”) pursuant to which Liberty Global or its designated affiliate (Liberty Global or such affiliate, the “Offeror”) agreed to launch a tender offer (the “Offer”) to acquire all of the outstanding shares of Sunrise (each, a “Sunrise Share” and collectively, the “Sunrise Shares”) in accordance with the terms and conditions of the Transaction Agreement and as set forth in a pre-announcement of the Offer published in accordance with applicable Swiss law on August 12, 2020 (the “Pre-Announcement”). The per share consideration for the tendered Sunrise Shares will be CHF 110 per share in cash.
The board of directors of Sunrise has unanimously approved the Transaction Agreement and the transactions contemplated thereby and resolved to recommend that its shareholders tender into the Offer. In addition, in connection with the Offer, Freenet AG, the largest shareholder of Sunrise holding approximately 24% of the outstanding Sunrise Shares, has entered into a tender undertaking with Liberty Global pursuant to which, subject to the terms and conditions therein, Freenet AG agreed to tender all Sunrise Shares of which it is the owner as of the date of the tender undertaking into the Offer.
The consummation of the Offer is subject to customary closing conditions, including, among others: the tender of such number of Sunrise Shares that represent, when combined with any Sunrise Shares that Liberty Global and its subsidiaries own, at least 66 2/3% of the fully diluted share capital of Sunrise; receipt of requisite regulatory clearances, including from applicable merger control authorities; the absence of any judgment, award, decision, order or any other authoritative measure of a competent court or governmental authority temporarily or permanently, in full or in part, preventing, prohibiting or declaring illegal the Offer or its settlement; the absence of a material adverse effect (as further described in the Pre-Announcement) with respect to Sunrise, any of its subsidiaries or Sunrise and its subsidiaries taken as a whole; and the absence of acquisition or sale of material assets or incurrence or repayment of material indebtedness of Sunrise.
The Transaction Agreement contains certain customary covenants. In particular, Sunrise has agreed, subject to the terms and conditions in the Transaction Agreement: (i) not to solicit alternative transactions or enter into discussions concerning, or provide any information in connection with, an alternative transaction; (ii) to issue a report to the shareholders of Sunrise recommending the acceptance of the Offer; (iii) to convene an extraordinary shareholders’ meeting for the election of Liberty Global’s nominees to Sunrise’s board of directors; and (iv) to operate its business in the ordinary course until the settlement of the Offer and to support the Offer. The Transaction Agreement also contains customary representations and warranties of each party.
Following successful completion of the Offer, Liberty Global intends to acquire any untendered Sunrise Shares in accordance with Swiss law and de-list the Sunrise Shares from the SIX Swiss Exchange.
The Transaction Agreement contains certain termination rights for both Liberty Global and Sunrise, including by either Liberty Global and Sunrise if the other party materially breaches its obligations or its representations or warranties under the Transaction Agreement and has failed to fully remedy such breach, or the Offer has not become unconditional and the Swiss Takeover Board no longer requires the Offer to remain open; by Liberty Global if a competing offer has an acceptance rate of more than 10% of the Sunrise Shares; and in connection with certain competing transactions. In certain circumstances, Sunrise may be obligated to pay Liberty Global an amount equal to CHF 50 million. Sunrise must pay Liberty Global such amount in the event that: (i) the Offer is not successful; (ii) the Offer has not become unconditional and is no longer required by the Swiss Takeover Board to remain open; or (iii) the Transaction Agreement is terminated, in each case due to a material breach by Sunrise of the Transaction Agreement or applicable law. Sunrise must also pay such amount if: (a) it fails to unanimously recommend the Offer to its shareholders; withdraws, modifies or qualifies its unanimous recommendation of the Offer; recommends, approves or enters into an agreement with a third party for an alternative transaction; or makes an announcement to the effect of the foregoing; or (b) a competing offer has been declared successful.
The Offer will be financed through: (i) loans of up to a maximum amount equivalent to CHF 3.2 billion (which includes amounts to refinance Sunrise’s existing debt) to be made available to Liberty Global and/or its subsidiaries by commercial banks under new term loan facilities; and (ii) in respect of the balance, through funds of Liberty Global (and certain hedging arrangements whereby any loans or funds not denominated in CHF will be converted into CHF), which will be made available to the Offeror through intra-group loans and/or equity injections. Sunrise has agreed to provide cooperation in connection with the debt financing in connection with the Offer.
The foregoing description of the Transaction Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the Transaction Agreement. A copy of the Transaction Agreement will be filed with Liberty Global’s Quarterly Report on Form 10-Q for the period ended September 30, 2020.
Item 7.01 Regulation FD Disclosures
On August 11, 2020, Liberty Global issued a press release announcing that Liberty Global and Sunrise had entered into the Transaction Agreement. A copy of the press release is attached hereto as Exhibit 99.1.
On August 12, 2020, Liberty Global published the Pre-Announcement as required under applicable Swiss law. A copy of the Pre-Announcement is attached hereto as Exhibit 99.2.
The information furnished pursuant to this Item 7.01 (including Exhibit 99.1 and Exhibit 99.2) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Exhibit Name
Exhibit No. | Exhibit Name | |
99.1* | ||
99.2* | ||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
* Exhibit is furnished herewith and not deemed to be filed.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
LIBERTY GLOBAL PLC | ||
By: | /s/ RANDY L. LAZZELL | |
Randy L. Lazzell | ||
Vice President | ||
Date: August 12, 2020
Exhibit 99.1
LIBERTY GLOBAL TO ACQUIRE 100% OF SUNRISE COMMUNICATIONS GROUP BY TENDER OFFER
Strategic Combination of UPC Switzerland and Sunrise to Create the
Leading Fixed-Mobile Challenger in Switzerland
Tender Offer is Unanimously Recommended by Sunrise Board of
Directors; Freenet, its 24% Shareholder, has Agreed to Tender its Shares
Denver, Colorado - August 11, 2020
Liberty Global (Nasdaq: LBTYA, LBTYB and LBTYK) announced today that, pursuant to the terms of a transaction agreement between Liberty Global and Sunrise Communications Group AG (SIX Swiss Exchange: SRCG), Liberty Global has agreed to make an all cash public tender offer for all publicly held shares of Sunrise at a price of CHF110 per share. The offer represents a 32% premium to the 60-day volume weighted average price (“VWAP”) per share of CHF83.17 during the period up to (and including) August 11, 2020 and values 100% of Sunrise’s equity at CHF5.0 billion1 , representing a total enterprise value of CHF6.8 billion2
KEY TRANSACTION HIGHLIGHTS
• | All-cash tender offer for 100% of the publicly held shares of Sunrise Communications Group AG (“Sunrise”) at a price of CHF110 per share, funded through a combination of Liberty Global’s existing cash, expected to be approximately CHF3.5 billion, and proceeds from new debt issuance. |
• | Sunrise's Board of Directors is unanimously recommending that its shareholders accept the offer; Freenet AG, Sunrise’s largest shareholder, which holds approximately 24% of Sunrise’s capital, has signed a binding, unconditional commitment to tender its shares at the offer price. |
______________________
1 | Based on a fully diluted number of shares of 45.4 million as of June 30, 2020 |
2 | As reported by Sunrise under International Financial Reporting Standards (“IFRS”). Based on net indebtedness as of March 31, 2020, including operating leases, of CHF1.8BN. Cash balance is adjusted for Sunrise dividend paid out in April 2020 |
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• | Transaction price is underpinned by significant expected total synergies of CHF3.1 billion on a net present value basis after integration costs, with the annual run rate of cost, capex and revenue synergies estimated at CHF275 million. The vast majority of the benefits (approximately CHF2.6 billion) relate to low risk cost and capital expenditure synergies. |
• | Attractive acquisition valuation3 for both parties representing 7.5x adjusted EBITDA4 and 10.3x adjusted OpFCF5 after taking into consideration revenue, cost and capital expenditure synergies (net of upgrade costs)6, or 10.0x adjusted EBITDA and 17.6x adjusted OpFCF before synergies. |
• | The tender offer is expected to commence by the end of August with publication of an offer prospectus; closing of the transaction will occur following receipt of requisite regulatory approvals, which the parties expect to receive around year end, and satisfaction of other customary closing conditions as further indicated in the pre-announcement published concurrently with this press release. |
STRATEGIC BENEFITS FOR CONSUMERS AND SHAREHOLDERS
• | Combination will create the leading national converged challenger in Switzerland. Together, the combined business would have CHF3.17 d billion in revenue, 2.1 million mobile post-paid subscribers, 1.2 million broadband subscribers and 1.3 million TV subscribers, reflecting approximately 30% market share in each segment. |
• | Greater scope for investment in next-generation network and product innovation. After a full acquisition of Sunrise, the combined business will be strongly positioned to continue its network roll-out including 5G and future technologies, supporting a range of new and enhanced products and services. The integration of UPC’s gigabit network, covering around 75% of homes, with Sunrise’s existing FTTH partnerships covering over 30% of homes, will ensure that 90% of Swiss households have access to 1 gigabit broadband speeds by 2021, with a clear roadmap to enable up to 10Gbps over time. In addition, |
_______________________________
3 All valuation metrics are based on an offer price of CHF110 per share
4 Based on the low end of the 2020 Sunrise Adjusted EBITDA guidance range under Sunrise’s definitions as reported under IFRS
5 Based on the low end of the 2020 Sunrise Adjusted EBITDA guidance range under Sunrise’s definitions as reported under IFRS. Capital expenditure figure represents the mid-point of Sunrise’s 2020 capital expenditure guidance range adjusted for CHF140 million of capital expenditures considered non-recurring upgrade capital expenditures, as defined by Sunrise
6 Pro forma for CHF275 million run-rate synergies comprising of CHF46 million of revenue, CHF187 million of cost and CHF42 million of capital expenditures
7 | Based on Sunrise’s revenue for the year ended December 31, 2019 as reported under IFRS plus the revenue of Liberty Global’s Swiss business for the year ended December 31, 2019, as reported under generally accepted accounting principles in the United States (“U.S. GAAP”). Liberty Global’s assessment of acquisition accounting impacts and differences between IFRS and U.S. GAAP on Sunrise’s revenue has not been completed |
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UPC Switzerland’s extensive fibre backbone will further strengthen Sunrise's leadership position in both 4G and 5G.
• | Differentiated, converged offers for customers. Sunrise is recognized as having best-in-class mobile infrastructure, while also building a meaningful customer base in broadband and TV. UPC Switzerland is the country’s leading provider of gigabit broadband, and offers the best video platform with features such as voice control, 4K, full content offerings and best in-class TV apps. As a fully converged provider, the combined business will be well positioned to compete in the Swiss market, accelerating the sale of converged fixed-mobile services to existing customers and new services using the best of each company’s product portfolios, skills and networks. |
• | Strengthened B2B platform. UPC Switzerland’s growing B2B business (#2 behind Swisscom on fixed) will benefit from the enhanced scale delivered by Sunrise’s customer base, increasing the ability to cross-sell converged mobile and fixed products and deliver a stronger customer experience. |
• | Value-enhancing transaction for Liberty Global shareholders. The transaction is consistent with Liberty Global’s strategy to create converged, national champions across its core European markets. It represents an attractive opportunity to deploy existing cash to unlock substantial synergies and sustainable free cash flow growth in a market where Liberty Global has invested for fifteen years. |
Mike Fries, CEO of Liberty Global, added “The industrial logic of this merger is undeniable, but the real winners are Swiss consumers and businesses. This powerful combination of 5G wireless and gigabit broadband will accelerate digital investment at a time when connectivity has never been more essential. Fixed-mobile convergence is the future of the telecom sector in Europe, and now Switzerland will have a true national challenger to drive competition and innovation for years to come. We look forward to welcoming Sunrise employees to the Liberty and UPC family and congratulate them and the board on their success.”
He continued, “This transaction is another significant step on our path to create fixed-mobile champions in all of our core markets, crystallizing the value of our superior broadband networks and driving long-term, sustainable free cash flow growth. Even after this deal, and assuming completion of our recently announced UK transaction, we will continue to have approximately $7 billion of liquidity8 to drive value-creation for shareholders.”
______________________
8 | Reflects June 30, 2020 liquidity as adjusted to include the anticipated proceeds to be received at closing related to our pending joint venture with Telefonica in the U.K., and to remove the June 30, 2020 unused borrowing capacity in the Virgin Media borrowing group. |
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FURTHER DETAILS
Under the terms of a transaction agreement between Liberty Global and Sunrise, Liberty Global has published a pre-announcement today for an all cash public tender offer for all publicly held shares of Sunrise at a price of CHF110 per share.
Liberty Global plans to fund the transaction through a combination of approximately CHF3.5 billion of cash from its balance sheet and approximately CHF3.2 billion of financing, of which CHF1.6 billion will be available to refinance existing indebtedness of Sunrise as needed. Upon becoming a wholly-owned subsidiary of Liberty Global, Sunrise will become part of the UPC credit pool. Targeted leverage for this pool will be 5.0x, pro forma for this transaction, including vendor financing and leases.
To find out more and to follow our progress, visit www.nationalconnectivitychallenger.ch
INDICATIVE TIMETABLE
The offer by Liberty Global is conditioned upon at least two-thirds of all Sunrise shares on a fully diluted basis tendering into the offer at the end of the offer period and other customary offer conditions, including regulatory approvals as set out in the pre-announcement.
The tender offer is expected to be launched by the end of August and will remain open for a minimum of twenty SIX Swiss Exchange (“SIX”) trading days following a ten trading-day cooling-off period under Swiss takeover law. After this period (and subject to extensions) and if the minimum acceptance threshold was reached or waived, there will be an additional acceptance period of ten SIX trading days. Thereafter, the tender offer will end but the transaction will remain subject to Swiss regulatory approval prior to closing. A pre-announcement, including the detailed conditions of the tender offer, is being published concurrently with this press release and a formal tender offer prospectus will be published to launch of the tender offer.
After completion of a successful offer, Liberty Global intends to initiate a squeeze-out procedure and delist Sunrise shares from trading on the SIX. Sunrise is therefore expected to become a wholly-owned subsidiary within the Liberty Global group of companies.
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In connection with the transaction, Credit Suisse International, J.P. Morgan and LionTree Advisors are acting as financial advisers to Liberty Global, and Homburger AG and Shearman & Sterling LLP are acting as legal advisers to Liberty Global.
ABOUT LIBERTY GLOBAL
Liberty Global (NASDAQ: LBTYA, LBTYB and LBTYK) is one of the world’s leading converged video, broadband and communications companies, with operations in 6 European countries under the consumer brands Virgin Media, Telenet and UPC. We invest in the infrastructure and digital platforms that empower our customers to make the most of the digital revolution.
Our substantial scale and commitment to innovation enable us to develop market-leading products delivered through next-generation networks that connect 11 million customers subscribing to 25 million TV, broadband internet and telephony services. We also serve 6 million mobile subscribers and offer WiFi service through millions of access points across our footprint.
In addition, Liberty Global owns 50% of VodafoneZiggo, a joint venture in the Netherlands with 4 million customers subscribing to 10 million fixed-line and 5 million mobile services, as well as significant investments in ITV, All3Media, ITI Neovision, LionsGate, the Formula E racing series and several regional sports networks.
For more information, please visit www.libertyglobal.com or contact:
Investor Relations: Corporate Communications:
Max Adkins +44 20 8483 6336 Molly Bruce +1 303 220 4202
John Rea +1 303 220 4238 Matt Beake +44 20 8483 6428
Stefan Halters +44 20 8483 6211
IMPORTANT ADDITIONAL INFORMATION
The tender offer described herein (the Offer) has not yet commenced. This release is for informational purposes only and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer, to purchase or subscribe for any registered shares in Sunrise or Sunrise's ADSs, nor shall it form the basis of, or be relied on in connection with, any contract therefor. At the time the Offer is commenced, shareholders of Sunrise are urged to read the Offer documents, which are or will be available at www.nationalconnectivitychallenger.ch.
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U.S. shareholders of Sunrise may also call +1 303 220 6600 (US) or email ir@LibertyGlobal.com to request a copy of the offer documents, which will be provided free of charge upon request. Sunrise is incorporated in Switzerland and listed on the SIX Swiss Exchange (“SIX”), and any offer for its securities will be subject to Swiss disclosure and procedural requirements, which differ from those that are applicable to offers conducted solely in the United States. The transactions described above will be structured to comply with securities laws and regulations applicable to transactions of this type. The communication is not being made by, and has not been approved by, an “authorised person” for the purposes of Section 21 of the U.K. Financial Services and Markets Act 2000.
OFFER RESTRICTIONS
The Offer will not be made, directly or indirectly, in any country or jurisdiction in which it would be considered unlawful or otherwise violate any applicable laws or regulations, or which would require Liberty Global or any of its subsidiaries to change or amend the terms or conditions of the Offer in any material way, to make an additional filing with any governmental, regulatory or other authority or take additional action in relation to the Offer. It is not intended to extend the Offer to any such country or jurisdiction. Any such documents relating to the Offer must neither be distributed in any such country or jurisdiction nor be sent into such country or jurisdiction, and must not be used for the purpose of soliciting the purchase of securities of Sunrise by any person or entity resident or incorporated in any such country or jurisdiction.
The Offer will be made in the U.S. pursuant to Section 14(e) of, and Regulation 14E under, the U.S. Securities Exchange Act of 1934, as amended (the U.S. Exchange Act), subject to the exemptions provided by Rule 14d-1 and Rule 14e-5 under the U.S. Exchange Act and any exemptions from such requirements granted by the U.S. Securities and Exchange Commission, and otherwise in accordance with the requirements of Swiss law.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “may,” “target,” and similar expressions and variations or negatives of these words. These forward-looking statements may include, among other things, statements relating to the outlook in Switzerland of Sunrise and Liberty Global; operational expectations, including with respect to the development, launch and benefits of innovative and advanced products and services, including gigabit speeds, new technology and next generation platform rollouts or launches; future
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growth prospects and opportunities, results of operations, uses of cash, tax rates, and other measures that may impact the financial performance of the companies; anticipated benefits and synergies and estimated costs of the proposed transaction; the expected timing of completion of the proposed transaction; and other information and statements that are not historical facts. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied by these statements. These risks and uncertainties include events that are outside of the control of the parties, such as: (i) Sunrise, Liberty Global, and our respective operating companies’ ability to meet challenges from competition and to achieve forecasted financial and operating targets; (ii) the effects of changes in laws or regulations; (iii) general economic, legislative, political and regulatory factors, and the impact of weather conditions, natural disasters, or any epidemic, pandemic or disease outbreak (including COVID-19); (iv) Sunrise, Liberty Global, and our respective affiliates’ ability to obtain regulatory approvals and satisfy other conditions to the consummation of the proposed transaction; (v) the proposed transaction may not be completed on anticipated terms and timing or completed at all; (vi) Liberty Global and our affiliates’ ability to successfully integrate Sunrise and realize anticipated efficiencies and synergies from the proposed transaction; (vii) the outcome of any potential litigation that may be instituted with respect to the proposed transaction; (viii) the potential impact of unforeseen liabilities, future capital expenditures, revenues, expenses, economic performance, indebtedness, financial condition on the future prospects and business of Sunrise and Liberty Global’s Swiss business after the consummation of the proposed transaction; (ix) any negative effects of the announcement, pendency or consummation of the proposed transaction; and (x) management’s response to any of the aforementioned factors. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, please see Liberty Global’s filings with the U.S. Securities and Exchange Commission, including Liberty Global’s most recently filed Form 10-Q. These forward-looking statements speak only as of the date of this release. Sunrise and Liberty Global expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.
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Exhibit 99.2
Pre-Announcement of the Public Tender Offer by
Liberty Global plc, London, United Kingdom
(or one or several of its direct or indirect subsidiaries, in which case Liberty Global plc will guarantee their obligations to the extent required)
for all publicly held registered shares with a nominal value of CHF 1.00 each of
Sunrise Communications Group AG, Opfikon, Switzerland
On the terms and subject to the conditions set forth below, Liberty Global plc, a public limited company organized under the United Kingdom Companies Act 2006, with registered office in London, United Kingdom (Liberty Global), or one or several of its direct or indirect subsidiaries (Liberty Global or such subsidiary or subsidiaries, the Offeror), intends to launch within six (6) weeks a public tender offer (the Offer) pursuant to art. 125 et seq. of the Swiss Federal Act on Financial Market Infrastructure and Market Conduct in Securities and Derivatives Trading of June 19, 2015 (Bundesgesetz über die Finanzmarktinfrastrukturen und das Marktverhalten im Effekten- und Derivatehandel), as amended, and its implementing ordinances for all publicly held registered shares (Namenaktien) of Sunrise Communications Group AG, Opfikon, Switzerland (the Company or Sunrise), with a nominal value of CHF 1.00 each (each, a Sunrise Share).
On August 12, 2020, Liberty Global and the Company entered into a transaction agreement pursuant to which Liberty Global agreed to, or cause the Offeror to, submit, publish and conduct the Offer, and the Company's board of directors has unanimously resolved, inter alia, to recommend the Offer for acceptance by the holders of Sunrise Shares. On the same date, Liberty Global and freenet AG (Freenet), a stock corporation organized under the laws of Germany with registered office in Büdelsdorf, Germany, holding 11,051,578 Sunrise Shares, corresponding to 24.4% of the Company's share capital as of the date of this pre-announcement (the Pre-Announcement), entered into a tender undertaking in which Freenet agreed to tender all 11,051,578 Sunrise Shares held by Freenet into the Offer.
I. Terms of the Offer
The Offer is expected to be made on the following main terms:
A. Object of the Offer
Except as set forth below and subject to the offer restrictions, the Offer will extend to all publicly held Sunrise Shares.
The Offer will not extend to (i) Sunrise Shares held by Liberty Global or any of its direct or indirect subsidiaries (each direct or indirect subsidiary of Liberty Global or of Sunrise, including in the case of Liberty Global the Offeror, hereinafter a Subsidiary, and Sunrise together with its Subsidiaries, the Sunrise Group), (ii) Sunrise Shares held by the Company or any of its Subsidiaries or (iii) the
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American Depositary Receipts of the Company which are traded over the counter (OTC) in the United States of America.
B. Offer Price
The offer price for each Sunrise Share is CHF 110.00 net in cash (the Offer Price).
The Offer Price will be reduced by the gross amount of any dilutive effects in respect of the Sunrise Shares prior to the consummation of the Offer (the Settlement, and the date of such Settlement, the Settlement Date), including dividend payments and other distributions of any kind, stock splits or reverse stock splits, demergers and spin-offs, capital increases and the sale of treasury shares at an issuance or sale price per Sunrise Share below the Offer Price, the purchase by the Company or any of its Subsidiaries of Sunrise Shares at a purchase price above the lower of the Offer Price and the prevailing share price, the issuance by the Company or any of its Subsidiaries of options, warrants, convertible securities or other rights to acquire Sunrise Shares or other securities of the Company, and repayments of capital in any form.
The Offer Price implies a premium of 32% to the volume-weighted average price of all on-exchange transactions in Sunrise Shares executed on the SIX Swiss Exchange Ltd (SIX) during the sixty (60) SIX trading days (each a Trading Day) prior to the publication of this Pre-Announcement (being CHF 83.17).
C. Offer Period and Additional Acceptance Period
It is expected that the offer prospectus relating to the Offer (the Offer Prospectus) will be published within six (6) weeks from the date of this Pre-Announcement. After the lapse of the cooling-off period of ten (10) Trading Days, the Offer will be open for acceptance for at least twenty (20) Trading Days (the Offer Period). The Offeror reserves the right to extend the Offer Period once or several times to a maximum of forty (40) Trading Days or, with the approval of the Swiss Takeover Board (the TOB), beyond forty (40) Trading Days. If the Offer is successful, after the expiration of the (possibly extended) Offer Period, there will be an additional acceptance period of ten (10) Trading Days for the subsequent acceptance of the Offer (the Additional Acceptance Period).
Assuming that the Offer Prospectus will be published on August 27, 2020 and applying the minimum periods above, the Offer Period would run from about September 11, 2020 until about 4 p.m. Swiss time on October 8, 2020, and the Additional Acceptance Period would run from about October 15, 2020 until about 4 p.m. Swiss time on October 28, 2020.
D. Offer Conditions, Waiver of Offer Conditions and Period for Which the Offer Conditions are in Force and Effect
1. Offer Conditions
The Offer is expected to be subject to the conditions set forth below (each a Condition):
(a) | Minimum Acceptance Rate: By the end of the (possibly extended) Offer Period, the Offeror shall have received valid and irrevocable acceptances for such number of Sunrise Shares |
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representing, when combined with any Sunrise Shares that Liberty Global and its Subsidiaries will own at the end of the (possibly extended) Offer Period (but not including Sunrise Shares held by the Company or any of its Subsidiaries), at least 66 2/3% of the fully diluted share capital of Sunrise as at the end of the (possibly extended) Offer Period (i.e., of all Sunrise Shares issued as at such date plus all Sunrise Shares the issuance of which (i) has been resolved by a shareholders' meeting or the board of directors of the Company before such date, or (ii) may occur through the exercise of options or conversion or other rights for the issuance, acquisition, transfer or receipt of Sunrise Shares which are issued at, or the issuance of which has been resolved by the shareholders' meeting or the board of directors of the Company before, such date).
(b) | Merger Clearances and Other Approvals: All waiting periods applicable to the acquisition of the Company by the Offeror shall have expired or been terminated and all competent merger control and other authorities and, if applicable, courts in all jurisdictions shall have approved or cleared or, as the case may be, not prohibited or objected to, the Offer, its Settlement and the acquisition of the Company by the Offeror (each such expiration or termination of a waiting period, approval, clearance, non-prohibition or non-objection, a Clearance). No condition, restriction or undertaking shall have been imposed on Liberty Global, the Company and|or any of their Subsidiaries in connection with any Clearance, and no Clearance shall be subject to any condition, restriction or undertaking on any of them that, individually or together with any other condition, restriction or undertaking or other facts, occurrences, circumstances or events would reasonably be capable of causing a Material Adverse Effect (as defined below) on Liberty Global, the Company, any of their Subsidiaries or on the combined group consisting of Liberty Global, its Subsidiaries and the Sunrise Group when aggregating all respective effects on Liberty Global, all of its Subsidiaries and the Sunrise Group. |
(c) | No Injunction or Prohibition: No judgment, award, decision, order or other authoritative measure shall have been issued temporarily or permanently, in full or in part, preventing, prohibiting or declaring illegal the Offer, its acceptance, the Settlement or the acquisition of the Company by the Offeror. |
(d) | No Material Adverse Effect: By the end of the (possibly extended) Offer Period, no facts, occurrences, circumstances or events shall have arisen or occurred, and no facts, occurrences, circumstances or events shall have been disclosed or reported by the Company or otherwise come to Libery Global's or the Offeror's attention which, individually or together with any other facts, occurrences, circumstances, events or conditions, restrictions or undertakings, would reasonably be capable of having a Material Adverse Effect on the Company, any of its Subsidiaries or on the Sunrise Group, taken as a whole. |
A Material Adverse Effect means a reduction of:
• | the annual consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) of CHF 66.8 million – corresponding to 10% of the adjusted EBITDA of the Sunrise Group in the financial year 2019 as per the Company's annual report 2019 – or more; or |
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• | the annual consolidated revenue of CHF 108.6 million – corresponding to 7% of the annual consolidated revenue excluding hardware and hubbing of the Sunrise Group in the financial year 2019 as per the Company's annual report 2019 – or more; or |
• | the consolidated total equity of CHF 134.1 million – corresponding to 10% of the consolidated total equity of the Sunrise Group as of December 31, 2019 as per the Company's annual report 2019 – or more. |
(e) | Registration in the Share Register of the Company: The board of directors of the Company shall have resolved to register the Offeror and|or any other company controlled and designated by Liberty Global in the Company's share register as shareholder(s) with voting rights with respect to all Sunrise Shares that Liberty Global or any of its Subsidiaries has acquired or may acquire (with respect to Sunrise Shares to be acquired in the Offer, subject to all other Conditions having been satisfied or waived), and the Offeror and|or any other company controlled and designated by Liberty Global shall have been registered in the share register of the Company as shareholder(s) with voting rights with respect to all Sunrise Shares acquired. |
(f) | Resignation and Appointment of Members of the Board of Directors of the Company: All members of Sunrise's board of directors shall have resigned from their functions on the board of directors of the Company and its Subsidiaries with effect from and subject to the Settlement, and a duly convened general meeting of the Company's shareholders shall have elected the persons nominated by the Offeror to the Company's board of directors with effect from and subject to the Settlement. |
(g) | No Adverse Resolutions by the General Meeting of Shareholders of the Company: The general meeting of shareholders of the Company shall not have: |
(A) | resolved or approved any dividend, other distribution or capital reduction or any acquisition, spin-off (Abspaltung), transfer of assets and liabilities (Vermögensübertragung) or other disposal of assets (x) with an aggregate value or for an aggregate consideration of more than CHF 406.2 million (corresponding to 10% of the consolidated total assets of the Sunrise Group as of December 31, 2019, as per the Company's annual report 2019), or (y) contributing in the aggregate more than CHF 66.8 million to the annual consolidated EBITDA (corresponding to 10% of the adjusted EBITDA of the Sunrise Group in the financial year 2019, as per the Company's annual report 2019); |
(B) | resolved or approved any merger, demerger (Aufspaltung) or ordinary, authorized or conditional increase of the share capital of the Company; or |
(C) | adopted any amendment of the articles of association of the Company to introduce any transfer restrictions (Vinkulierung) or voting limitations (Stimmrechtsbeschränkungen). |
(h) | No Acquisition or Sale of Material Assets or Incurrence or Repayment of Material Indebtedness: With the exception of the obligations that have been made public prior to the date of this Pre-Announcement or that are related to the Offer or arise from the Settlement, between |
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December 31, 2019, and the transfer of control to the Offeror, the Company and its Subsidiaries shall not have undertaken to acquire or sell (or have acquired or sold) any assets or have undertaken to incur or repay (or have incurred or repaid) any indebtedness in the aggregate amount or aggregate value of more than CHF 406.2 million (corresponding to 10% of the consolidated total assets of the Sunrise Group as of December 31, 2019, as per the Company's annual report 2019).
2. Waiver of Offer Conditions
The Offeror reserves the right to waive, in whole or in part, one or more of the Conditions.
3. Period for Which the Offer Conditions are in Force and Effect
Conditions (a) and (d) shall be in force and in effect until the expiration of the (possibly extended) Offer Period.
Conditions (b), (c), (g) and (h) shall be in force and effect until the Settlement.
Conditions (e) and (f) shall be in force and effect until the Settlement or, if earlier, until the date when the applicable corporate body of the Company has taken the required resolution mentioned therein.
If any of the Conditions (a) or (d) have not been satisfied or waived by the end of the (possibly extended) Offer Period, the Offer will be declared unsuccessful.
If the respective corporate body of the Company resolves on the matters specified in Conditions (e) or (f) prior to the expiration of the (possibly extended) Offer Period and any of the Conditions (e) or (f) have not been satisfied or waived (with respect to the resolutions of corporate bodies mentioned therein) by the end of the (possibly extended) Offer Period, the Offer will be declared unsuccessful.
If the Condition (b) has not been satisfied or waived by the anticipated Settlement Date, the Offeror is obliged to postpone the Settlement for a period of up to four months after the expiration of the Additional Acceptance Period (the Postponement). If any of the Conditions (c), (g) or (h) or, if and to the extent still applicable (see preceding paragraphs), any of the Conditions (e) or (f), have not been satisfied or waived by the anticipated Settlement Date, the Offeror shall be entitled to declare the Offer unsuccessful or to declare a Postponement. During the Postponement, the Offer shall continue to be subject to the Conditions (b), (c), (g) and (h) and, if and to the extent still applicable (see preceding paragraphs), Conditions (e) and (f), as long as, and to the extent, such Conditions have not been satisfied or waived. Unless the Offeror applies for, and the TOB approves, an additional postponement of the Settlement, the Offeror will declare the Offer unsuccessful if such Conditions have not been satisfied or waived during the Postponement.
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II. Offer Restrictions
A. General
The Offer will not be made, directly or indirectly, in any country or jurisdiction in which the Offer would be considered unlawful or otherwise violate any applicable laws or regulations, or which would require Liberty Global or any of its Subsidiaries to change or amend the terms or conditions of the Offer in any way, to make an additional filing with any governmental, regulatory or other authority or take additional action in relation to the Offer. It is not intended to extend the Offer to any such country or jurisdiction. Any such document relating to the Offer must neither be distributed in any such country or jurisdiction nor be sent into such country or jurisdiction, and must not be used for the purpose of soliciting the purchase of securities of the Company by any person or entity resident or incorporated in any such country or jurisdiction.
This Pre-Announcement does not constitute the Offer. The Offeror will disseminate the Offer Prospectus (with full Offer terms and conditions) as required by applicable law, and the shareholders of the Company should review the Offer Prospectus and all other documents relating to the Offer carefully. The Offer may not be accepted before publication of the Offer Prospectus and expiration of a cooling-off period of ten (10) Trading Days (if not extended by the TOB), which will run from the Trading Day immediately after the publication date of the Offer Prospectus.
According to Swiss law, Sunrise Shares tendered into the Offer may generally not be withdrawn after they are tendered except under certain circumstances, in particular in case a competing offer for the Sunrise Shares is launched.
B. Notice to U.S. Holders
The Offer will be made for the registered shares of the Company, a Swiss company whose shares are listed on the SIX, and is subject to Swiss disclosure and procedural requirements, which are different from those of the United States of America (the U.S.). The Offer will be made in the U.S. pursuant to Section 14(e) of, and Regulation 14E under, the U.S. Securities Exchange Act of 1934, as amended (the U.S. Exchange Act), subject to the exemptions provided by Rule 14d-1 and Rule 14e-5 under the U.S. Exchange Act and any exemptions from such requirements granted by the U.S. Securities and Exchange Commission (the SEC), and otherwise in accordance with the requirements of Swiss law. Accordingly, the Offer will be subject to disclosure and other procedural requirements, including with respect to withdrawal rights, settlement procedures and timing of payments that are different from those applicable under U.S. domestic tender offer procedures and laws. Holders of Sunrise Shares resident in the U.S. (each a U.S. Holder) are urged to consult with their own Swiss advisors regarding the Offer.
In accordance with the laws of Switzerland and subject to applicable regulatory requirements, Liberty Global and its Subsidiaries and affiliates or their respective nominees or brokers (acting as agents for the Offeror) may from time to time after the date of the Offer Prospectus, and other than pursuant to the Offer, directly or indirectly, purchase or arrange to purchase Sunrise Shares or any securities that are convertible into, exchangeable for or exercisable for Sunrise Shares from
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shareholders of the Company who are willing to sell their Sunrise Shares outside the Offer from time to time, including purchases in the open market at prevailing prices or in private transactions at negotiated prices, and shall comply with applicable laws and regulations in Switzerland and applicable U.S. securities laws, rules and regulations and pursuant to exemptive relief granted by the SEC from Rule 14e-5 under the U.S. Exchange Act. Any such purchases will not be made at prices higher than the Offer Price or on terms more favorable than those offered pursuant to the Offer unless the Offer Price is increased accordingly. Any information about such purchases or arrangements to purchase will be publicly disclosed in the U.S. on https://www.nationalconnectivitychallenger.ch/#for-investors to the extent that such information is made public in accordance with the applicable laws and regulations of Switzerland. In addition, the financial advisors to the Company and, subject to applicable Swiss and U.S. securities laws, rules and regulations and pursuant to exemptive relief granted by the SEC from Rule 14e-5 under the U.S. Exchange Act, the financial advisors to Liberty Global and its affiliates may also engage in ordinary course trading activities in securities of the Company, which may include purchases or arrangements to purchase such securities.
It may be difficult for U.S. Holders to enforce their rights and any claim arising out of U.S. securities laws, since the Offeror and the Company are located in a non-U.S. jurisdiction, and some or all of their officers and directors may be residents of a non-U.S. jurisdiction. U.S. Holders may not be able to sue a non-U.S. company or its officers or directors in a U.S. or non-U.S. court for violations of the U.S. securities laws. Further, it may be difficult to compel a non-U.S. company and its affiliates to subject themselves to a U.S. court's judgment.
The receipt of cash pursuant to the Offer by a U.S. Holders may be a taxable transaction for U.S. federal income tax purposes and under applicable U.S. state and local laws, as well as foreign and other tax laws. Each U.S. Holder of the Company is urged to consult his or her independent professional advisor immediately regarding the U.S. tax consequences of an acceptance of the Offer. Neither the SEC nor any securities commission of any State of the U.S. has (a) approved or disapproved of the Offer; (b) passed upon the merits or fairness of the Offer; or (c) passed upon the adequacy or accuracy of the disclosure in this Pre-Announcement. Any representation to the contrary is a criminal offence in the U.S.
C. American Depositary Shares and American Depositary Receipts
The Offeror is aware that there is an "unsponsored" American Depositary Receipt Program concerning Sunrise Shares. The Offer will not be made for American Depositary Shares representing Sunrise Shares (ADSs), nor for American Depositary Receipts evidencing such ADSs (ADRs). However, the Offer will be made for the Sunrise Shares that are represented by the ADSs. Holders of ADSs and ADRs are encouraged to consult with the appropriate depositary regarding the tender of Sunrise Shares that are represented by ADSs. The Offeror is unaware of whether any respective depositary will make arrangements to tender the underlying Sunrise Shares into the Offer on behalf of holders of ADSs or ADRs.
Generally, holders of ADSs may be able to present their ADSs to the appropriate depositary for cancellation and (upon compliance with the terms of the deposit agreement relating to the
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"unsponsored" American Depositary Receipt Program concerning Sunrise Shares, including payment of the depositary’s fees and any applicable transfer fees, taxes and governmental charges) delivery of Sunrise Shares to them, in order to become shareholders of the Company. The Sunrise Shares delivered to holders of ADSs upon such cancellation may then be tendered into the Offer. Holders of ADSs should consult with the relevant depositary regarding their ability to obtain the underlying Sunrise Shares and the applicable procedures. Holders of ADSs should be aware, however, that in order to tender in this manner, they may need to have an account in Switzerland into which the Sunrise Shares can be delivered.
D. United Kingdom
The communication of this Offer document is not being made by, and has not been approved by, an authorised person for the purposes of Section 21 of the Financial Services and Markets Act 2000. In the United Kingdom (U.K.), this communication and any other offer documents relating to the Offer is|will be directed only at persons (i) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order), (ii) falling within article 49(2)(a) to (d) ("high net worth companies, unincorporated associations, etc.") of the Order or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). No communication in respect of the Offer must be acted on or relied on by persons who are not relevant persons. The Offer, any investment or investment activity to which this communication relates is|will be available only to relevant persons and will be engaged in only with relevant persons.
E. Australia, Canada and Japan
The Offer will not be addressed to shareholders of the Company whose place of residence, seat or habitual abode is in Australia, Canada or Japan, and such shareholders may not accept the Offer.
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III. Additional Information
Additional information on the Offer is expected to be published electronically through the same media.
Identification
Security Number | ISIN | Ticker Symbol | |
Registered shares with a nominal value of CHF 1.00 each of Sunrise | 26'729'122 | CH0267291224 | SRCG |
August 12, 2020
Financial Advisors
Offer Manager