FILE PHOTO: The company’s logo is pictured at a shop of Swiss telecoms company Sunrise in Zurich, Jan. 14, 2015. REUTERS/Arnd Wiegmann/File Photo
ZURICH (Reuters) – Swiss telecommunications company Sunrise Communications (SRCG.S) on Thursday escalated its defence of its planned takeover of Liberty Global’s (LBTYA.O) Swiss unit UPC, touting additional synergies and blasting a shareholder that is fighting the deal.
German telecoms group Freenet (FNTGn.DE), Sunrise’s largest shareholder, has called the 6.3 billion Swiss franc ($6.41 billion) takeover unfavorable for existing shareholders.
In a broadside calling Freenet “self-serving,” Sunrise touted updated expectations of 280 million francs in annual synergies from buying Liberty Global’s UPC Swiss unit, 45 million more than previously announced.
Freenet was not immediately available to comment.
The Swiss company said these benefits, along with improved performance of UPC, would allow it to increase leverage and reduce the size of the 4.1 billion franc rights issue it foresees to pay for the deal by about 1 billion francs.
Sunrise said one-off integration costs needed to achieve the higher synergies are expected to increase from 140-150 million to 230-250 million francs. It added Freenet had rejected its proposed changes.
“Sunrise views Freenet as guided by its own short-term financial constraints and self-serving objectives which it seeks to solve at the expense of Sunrise and its shareholders,” Sunrise said, adding its board has decided to exclude Freenet from deliberations on the deal.
Sunrise second-quarter net income rose to 27 million francs, from 24 million francs in the year-earlier period, the Swiss company said. Revenue fell 1.7% to 455 million francs, which Sunrise said resulted from lower mobile hardware and hubbing sales.
Reporting by John Miller, editing by Silke Koltrowitz