Sunrise has announced that After the purchase of the cable operator, UPC, has rattled the share price of the telecommunications group at the commencement of trading in the basement. Shortly after 10 p.m., the share was quoted at 73,10 Swiss francs, or about 9.5 per cent in the Minus.

In the first minutes of trading, the Sunrise had to capture share temporarily stronger exchange rate losses. The rate sank to 70,20 francs, which corresponded to a Minus of 13 percent. The overall market, as measured by the Swiss Performance Index (SPI) moved, meanwhile, is only slightly negative (-0,3%). Also, a loss Rate of the market leader, Swisscom, whose shares were listed shortly after 10 o’clock at 458.40 Swiss francs, or about 1 percent in the Minus had to accept.

Contrary to the market reaction, analysts were, however, positive compared to the 6.3 billion Swiss francs for the acquisition of Sunrise. The target Acquisition is strategically sensible, it means the Band in the analysts comments.

“Significant and credible” potential for synergy

Vontobel, it was said, moreover, that the total estimated synergies of 2.8 billion Swiss francs were significantly higher than the estimates. And also the analysts of Jefferies rate the Deal due to “significant and credible” synergy potential positive, especially since the transaction is a “very strong industrial logic”. The concern was that the approval for the required capital increase is still outstanding and not a matter of course.

The analysts of the ZKB deal, however, with the effects of the proposed Acquisition on the Platzhirsch Swisscom: “in the Short to medium term, Sunrise and UPC are likely to be self-absorbed, which could cause Swisscom tactical advantages,” say the experts. During the estimated three-year integration phase, we expect a higher willingness of the customers.

Sunrise as a strong number two

Sunrise paid for the UPC 6.3 billion Swiss francs. The company announced on Wednesday evening. Thus, a stronger and convergent Challenger on the Swiss market should be created.

With the Sunrise and UPC Switzerland, two companies come together, the complement to a certain degree. Sunrise is in the mobile strong, UPC Internet and TV business. So far, UPC Switzerland was in the possession of the British cable network giant Liberty Global.

The transaction strengthens the Position of Sunrise as a strong number two in the areas of mobile, TV, broadband Internet and fixed-line telephony, the company said on Wednesday evening. UPC Switzerland is with high-speed broadband Internet and its own TV content, as well as a 17’500-kilometre-long fibre-optic network, an “attractive addition”.

Swisscom challenge

Sunrise-in-chief Olaf Swantee sees the Acquisition as a “great opportunity”. Switzerland will get a stronger telecoms provider with a very good infrastructure consisting of the cable network of UPC and the 4G and soon 5G mobile networks of Sunrise.

“We want to move the market,” he said on Wednesday evening, the news Agency AWP. The new Sunrise wanted to be the big Challenger to Swisscom.

In terms of Figures: In the case of the mobile customers of Sunrise, including the UPC comes on to a market share of 24 per cent, in the of broadband Internet at 30 per cent, and in the television business, with 1.4 million TV customers at 31 percent.

capital increase

Sunrise takes 6.3 billion Swiss francs in the Hand and will give it new share capital. Specifically, Sunrise will take over, with 3.6 billion Swiss francs, a part of the outstanding UPC debt.

The remaining part of the purchase price of 2.7 billion financed by Sunrise via the output of a rights issue to 4.1 billion Swiss francs. This goes into a bar to Liberty Global. With the Rest of existing debt in the amount of 1.1 billion to be repaid.

Sunrise on the assumption that the Deal can be completed in the second half of 2019. The approval by the competition authorities is expected in the second or third quarter of 2019.

The combined company Sunrise/UPC would have come in fiscal year 2018, with a turnover of 3.17 billion francs. Together, the number two in the industry comes down to an adjusted operating profit Ebitda of 1.24 billion.

In comparison with Swisscom and the new company is still a small fish. In the industry, Primus has generated in the last year, nearly 11.7 billion Swiss francs in turnover and an operating profit of 4.2 billion.

synergies and job cuts?

The buyer of the Sunrise promises that the Deal synergies in costs and investments of a year, to 190 million Swiss francs from the third year after the completion of the transaction. This includes synergies of around CHF 45 million to come from the fifth year after the Acquisition Earnings.

which means the synergies for the employees, didn’t like to say Sunrise-chief Swantee. “It’s too early.” He presume, however, that the implications for the actual service departments and the sales team would be moderate. A reduction was expected in Management and Administration.

In the case of UPC, it was said that one could assume that there would be in the case of duplication of a removal. “As it happens, is still open. The process should be transparent and fair. The Posts are to be staffed with the best people,” said spokeswoman Alexandra Bini. The extent of degradation is not yet known. The sun in the hands of the Sunrise.

Sunrise it will run better

at the same time, with the Acquisition of published Sunrise, the Figures for fiscal year 2018. Sales rose 1.2 percent to 1.88 billion Swiss francs. The adjusted operating profit Ebitda shrank, however slightly, by 1.1 per cent to CHF 601 million.

the bottom line is a net profit of 107 million still remained. In the previous year, 505 million Swiss francs had still rung in the cash register, which was the sale of 2200 antenna masts due. This had brought in 420 million Swiss francs. Excluding the mast of sale, the net profit in 2018 rose by 3.4 percent.

Less well on UPC. This has suffered in fiscal year 2018 with a sales decline of 3.7 percent to to 1.30 billion Swiss francs. The reason is the tougher competition and customer development in the past few quarters. The operating profit is significantly like it.

In the last twelve months, UPC has lost significantly to customers. The greatest blood-letting was in the TV business. And against year-end has accelerated the descent. In the fourth quarter, revenue from UPC has shrunk to 5.1 percent.

Sunrise is also assumed that the financial performance of UPC 2019 failing again negative and of approximately the same level as of 2018 will be. The new owner is of the opinion that the situation of the UPC will stabilize after that, and refers to operational measures, such as a new TV-a video platform and bundled offerings. (mac/fal/chk/sda)

Created: 28.02.2019, 09:30 PM

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