Sunrise Communications, a major player in the Swiss telecommunications industry, is set to return to the stock market on November 15 after its initial public offering (IPO) in 2015.
Sunrise was acquired by Liberty Global in 2020 and subsequently delisted from the stock exchange. The company has since merged with cable network operator UPC and undergone significant restructuring. With an annual turnover of approximately CHF 3 billion and a workforce of around 2,800 employees, Sunrise now competes directly with Swisscom as a full-service provider.
The upcoming IPO is a spin-off, allowing Liberty Global shareholders to receive subscription rights that can be converted into Sunrise shares. This rights trading will begin on November 13, two days before the Swiss IPO, and continue for about nine months. Analysts estimate that Sunrise could achieve a market capitalization ranging from CHF 3 billion to CHF 4.5 billion.
Sunrise has witnessed changes in its shareholder base and market dynamics since its first IPO. The competitive landscape has intensified, particularly in mobile telephony, leading to shrinking margins. Despite this, Sunrise has maintained its profitability over the last ten years and has grown in size and market share.
Looking ahead, Sunrise has chosen not to build its own fiber optic network but has upgraded its existing cable infrastructure to compete effectively with fiber optic networks. The company currently rents infrastructure wherever fiber optics are deployed.
The upcoming reallocation of mobile communication frequencies in 2027 poses a potential financial challenge for Sunrise. The company is not making provisions for this expenditure at the moment.
The relationship between Sunrise and its major shareholders, particularly Liberty Global, has raised questions about corporate governance. The Board of Directors comprises seven members, four of whom are independent of Liberty Global. Sunrise will issue two classes of shares as part of the spin-off: A shares, which will be freely traded, and B shares, which will carry ten times the voting rights and will be allocated to Liberty Global executives John Malone and Mike Fries.
In summary, Sunrise's return to the stock market is a significant moment for the company as it faces intense competition and evolving market dynamics. The company aims to maintain profitability, expand its market share, and address governance and shareholder relation complexities.