Salt threatens legal action against Sunrise’s Liberty Global deal

Swiss service provider Salt has said it is contemplating legal action against Sunrise in relation to the latter’s planned acquisition by Liberty Global’s UPC Switzerland. The official prospectus for the latter was published today.

Salt’s threat of legal action relates to the fibre-to-the-home JV the pair agreed to set up to deploy FTTH networks across the country in May.

The new company, Swiss Open Fiber, was to be co-owned by Salt and Sunrise with equal shareholding alongside another prospective equity partner.

The goal was for Swiss Open Fiber to reach 1.5 million homes passed in the coming five to seven years, for a total investment of up to CHF3 billion (€2.8 billion).

Salt said that is “concerned that the proposed transaction by which Liberty or its designated affiliate would acquire Sunrise infringes on contractual rights established as part of its Swiss Open Fibre joint venture with Sunrise”, adding that “unanimous Sunrise Board approval for the deal and the irrevocable tender by Freenet of its 24.4% stake in Sunrise have already destroyed significant value for Salt and its shareholders”.

The move came ahead of Salt publishing its Q2 financials, which saw the company take a hit on mobile roaming revenue as a result of the COVID-19 crisis.

The group saw revenues fall by 6.4% to CHF254.5 million (€236.9 million) for the quarter, despite an increase in post-paid mobile subscribers of 7,600, taking its total to 1.265 million.

Salt said that its fixed line product has also seen strong momentum. In TV, which is offered as part of triple and quad-play packages, the company said that its offer had been boosted by the recent launch of a new version of its TV app.

Liberty Global plans to launch its tender offer for Sunrise on September 11, and it is scheduled to expire on October 8. It has to secure acceptance of two thirds of shares, which is seen as more or less a given thanks to the board’s recommendation and the acceptance of the offer by Freenet, the company’s biggest shareholder.

Liberty Global’s acquisition of Sunrise comes after itl abandoned its planned sale of UPC Switzerland, whose business has been challenged by the competitiveness of the Swiss market, to Sunrise in December last year amid a debacle that saw Sunrise’s management fail to convince shareholders, notably Freenet, of the merits of the deal.