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Switzerland’s third largest telco, Salt, says that Sunrise’s acquisition by Liberty Global would infringe on a contract they had in place with Sunrise for a joint fibre investment
Earlier this month, the Swiss telecoms industry saw a major turn around, with Liberty Global announcing that it will purchase the country’s second-largest operator, Sunrise Communications, for around $7.4 billion.
Until recently, negotiations had focus had been reversed, with Sunrise mulling a $6 billion purchase of Liberty Global’s local cable unit, UPC. However, the deal was ultimately rejected by Sunrise’s largest shareholder due to dissatisfaction with the deal’s terms.
The purchase of Sunrise should cause major upheaval in the Swiss market, creating a new challenger poised to take on long-dominant rival Swisscom.
However, not everyone in the market is pleased with the deal. As of yesterday, third-place telco Salt is reportedly considering taking legal action against Sunrise, arguing that the latter’s acquisition “infringes on contractual rights” included as part of an agreement they signed in May this year.
The deal, which saw Salt and Sunrise agree to the joint creation of fibre company Swiss Open Fiber, pledged a joint investment of 3 billion Swiss francs over the next five to seven years to create a national broadband network. Construction of the joint network was scheduled to begin later this year.
“Salt is concerned that the proposed transaction by which Liberty or its designated affiliate would acquire Sunrise infringes on contractual rights established as part of its Swiss Open Fibre joint venture with Sunrise,” said Salt in a statement, adding that Sunrise’s move had “destroyed significant value for Salt and its shareholders”.
However, Sunrise maintains its innocence, saying it cannot be in breach of contract since the exclusivity deal they signed with Salt excluded a public tender offer.
On Thursday, Salt appointed a law firm to file proceedings to gain access to any relevant documentation for the Sunrise acquisition.
Liberty Global itself, however, has not seemed concerned by this revelation, saying that their offer was “proceeding as planned”, with the aim of concluding the takeover by the end of the year.
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