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MarketScreener Homepage  >  Equities  >  Xetra  >  Freenet Group    FNTN   DE000A0Z2ZZ5

FREENET GROUP

(FNTN)
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Liberty Global hopes to revive deal as Sunrise to take $125 million hit

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11/13/2019 | 09:14am EST
FILE PHOTO: Swiss telecom company Sunrise's logo is seen at an office building in Zurich

U.S. cable group Liberty Global is holding out hope of reviving a sale of its Swiss unit to Sunrise Communications, which said on Wednesday it faces a 125 million Swiss francs (£98 million pounds) hit after abandoning the deal.

ZURICH (Reuters) - U.S. cable group Liberty Global is holding out hope of reviving a sale of its Swiss unit to Sunrise Communications, which said on Wednesday it faces a 125 million Swiss francs (£98 million pounds) hit after abandoning the deal.

Sunrise said costs from the 6.3 billion franc bid, halted after opposition from the Swiss telecom firm's top shareholder, include a 50 million franc break-up fee to Liberty Global, 19 million francs in underwriting fees and already-incurred integration costs of 24 million francs.

Last month, Sunrise scrapped its takeover of Liberty's UPC Switzerland business when German firm Freenet, which holds a 25% stake, balked on concerns the move was too expensive.

Freenet said that adding cable assets made little sense as the industry was transitioning to faster 5G mobile technology.

Liberty Global Chief Financial Officer Charlie Bracken said the company was not completely forgetting about the transaction and said the deal was still worth pursuing.

"If you look at the industrial logic of the deal it's very compelling," Bracken told the Morgan Stanley European TMT Conference in Barcelona, adding that he saw "a lot of reasons to monetise" the synergies it promised.

Bracken also said that Liberty would look at listing its local units, which would help to crystallise the value of their cash flows. "We'll be opportunistic," he said.

Sunrise, which released third-quarter results on Wednesday, said intimations that the deal could rise from the dead were "no longer relevant" and that for now it was moving on.

"All further talk at this time is hypothetical and speculative," Sunrise Chief Financial Officer Andre Krause told Reuters in an interview.

Sunrise shares were little changed at 1400 GMT and are down nearly 10% this year.

CEO Olaf Swantee, responding to a suggestion that he could resign after failing to seal the UPC transaction and falling out with top shareholder Freenet, said he and other managers were simply focused on Sunrise.

Swantee, a Dutchman who previously ran British mobile phone company EE Limited, added that Chairman Peter Kurer, who has come under fire for trying to force the deal, continues to enjoy management's support.

"Grumblings in the press about him are to a large extent unfair," Swantee said. "He's done a great job."

Sunrise reported a 52% surge in net income to 48 million francs on revenue up 1% to 474 million francs for the quarter to September 30.

For 2019 it expects earnings before interest, taxes, depreciation and amortisation (EBITDA) of 618-628 million francs on revenue of 1.86-1.9 billion and a dividend of 4.35-4.45 francs per share.

(Reporting by John Miller and Oliver Hirt in Zurich, Doug Busvine in Barcelona; editing by Sherry Jacob-Phillips, Kirsten Donovan)

By John Miller

Stocks mentioned in the article
ChangeLast1st jan.
FREENET GROUP 0.15% 20.11 Delayed Quote.-1.76%
LIBERTY GLOBAL PLC -2.51% 20.61 Delayed Quote.-6.99%
SUNRISE COMMUNICATIONS GROUP -0.12% 80.25 Delayed Quote.5.13%
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Financials (EUR)
Sales 2019 2 904 M
EBIT 2019 277 M
Net income 2019 219 M
Debt 2019 1 837 M
Yield 2019 8,22%
P/E ratio 2019 11,3x
P/E ratio 2020 11,1x
EV / Sales2019 1,52x
EV / Sales2020 1,49x
Capitalization 2 571 M
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Mean consensus HOLD
Number of Analysts 15
Average target price 19,84  €
Last Close Price 20,08  €
Spread / Highest target 39,4%
Spread / Average Target -1,22%
Spread / Lowest Target -27,8%
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Managers
NameTitle
Christoph Vilanek Chief Executive Officer
Helmut Thoma Chairman-Supervisory Board
Ingo Arnold Chief Financial Officer
Stephan A. Esch Chief Technology Officer
Claudia Anderleit Member-Supervisory Board
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