Liberty Global considers selling stake in Swiss telecom unit Sunrise

Liberty Global is exploring the sale of a stake in Sunrise, Switzerland’s second-largest telecom provider, ahead of a planned spin-off later this year, Reuters news report said. Discussions have been held with various investors, including Swiss family offices.

In February, Liberty Global, founded by U.S. cable pioneer John Malone, announced its intention to spin off Sunrise to shareholders on the SIX Swiss Exchange in the second half of the year. By early May, the company confirmed that the spin-off was on schedule for the fourth quarter.

JP Morgan and UBS are leading the search for investors. Liberty Global has committed to injecting 1.5 billion Swiss francs from its balance sheet into Sunrise before the spin-off to reduce leverage.

The potential deal could value Sunrise at an enterprise value between 8 to 9 billion Swiss francs ($8.91 billion). Liberty Global acquired Sunrise and took it off the stock market in 2020 for 6.8 billion Swiss francs.

Selling a stake in Sunrise could help manage the sale of shares by Liberty Global shareholders following the spin-off. Some shareholders may prefer not to own a telecom company operating solely in Switzerland. Pre-committed investors purchasing packages of shares could mitigate this issue.

As of the end of the first quarter of 2024, Sunrise’s net debt stood at 5.53 billion euros, with a net debt to EBITDA ratio of 5.13.