By Max Bernhard
Sunrise Communications Group on Tuesday canceled a shareholder meeting on its planned 6.3 billion Swiss francs ($6.4 billion) acquisition of Liberty Global PLC Swiss unit, citing lack of support from investors, effectively collapsing the deal.
Sunrise called the now canceled extraordinary general meeting--scheduled for Wednesday--to seek approval for a capital increase to help finance the deal. This was the last condition for the acquisition to go through. "Based on clear indications received from shareholders and Freenet's announcement to vote against the capital increase at the EGM, the board of directors of Sunrise has concluded that the clear majority of shareholders who have registered their shares to vote at the EGM do not support the capital increase," it said.
Liberty Global said it supports the cancellation of the EGM.
Freenet AG (FNTN.XE), which holds about a 25% stake in Sunrise, said at the beginning of October that it still wouldn't support the deal, after Sunrise had adjusted the capital structure for it.
"The adjustment to the target capital structure scratches only at the surface of the package of highly unfavorable deal terms and the fundamental strategic challenges of the transaction--in its entirety still leading to value destruction for all existing Sunrise shareholders," Freenet said then.
Write to Max Bernhard at firstname.lastname@example.org; @mxbernhard