freenet AG Acquires 23.83 per cent of Sunrise Communications Group AG

Monday, Mar 21, 2016

freenet AG signed a contract for the acquisition of 10,721,395 ordinary shares in Sunrise Communications Group AG, Zurich, Switzerland. This constitutes a stake of 23.83 per cent in Sunrise Communications Group AG. Next month, furthermore, freenet AG is going to acquire a further stake of up to 330,183 shares, or 0.73 per cent of the share capital, in Sunrise Communications Group AG under the same conditions.

The price of acquiring this 23.83% participating interest is around 714 million euros or 72.95 CHF per share in Sunrise Communications Group AG. The dividend for the financial year 2015 will be due to freenet AG. The dividend of 3.00 CHF per no-par-value share with entitlement to dividends that was proposed by the company's board of directors will be the subject of a resolution at Sunrise Communications Group AG's annual general meeting on 15 April 2016.

The transaction is being financed with borrowed capital. The financing structure is a bridge loan provided by a bank consortium with a term of three years and an interest rate at EURIBOR level plus a margin of 2.1 per cent. The company intends to use favourable market conditions for refinancing purposes. It is intended that freenet AG's CEO, Christoph Vilanek, as well as the company's CFO, Joachim Preisig, are to be represented on Sunrise Communications Group AG's board of directors. The transaction is expected to be completed soon. freenet AG's board of management has decided to support the proposals that the Sunrise Communications Group AG board of directors will be submitting to the company's annual general meeting on 15 April 2016.

Sunrise is the largest private telecommunications provider in Switzerland and has more than 3 million customers in the mobile communications, landline, internet and digital television segments.

"We have been watching the development of Sunrise Communications AG very closely for some time now. We understand their business model and, with regard to cash orientation and the financial profile, we can see strong parallels with our profile on the capital market. The acquisition of the shares from CVC Capital Partners is a great opportunity for freenet that we have been delighted to grasp," explains Christoph Vilanek, CEO of freenet AG.

The consolidation of the shares will lead proportionally in the financial year 2016 to additional EBITDA of around 10 million euros, as a result of which the forecast is being increased to slightly over 410 million euros (previously: slightly over 400 million euros). At the same time, freenet's free cash flow will increase to approximately 330 million euros (previously: around 300 million euros). The targets for the development of the performance indicators Group revenue, postpaid ARPU and customer ownership in the financial year 2016 remain unchanged: The company is remaining true to its expectation for an increase in Group revenue, a stabilisation of postpaid ARPU at the level of 2015 and a slight increase in customer numbers in the customer ownership area compared to the financial year 2015.

Despite the acquisition of the shares in Sunrise Communications Group AG, the Executive Board is confirming its current financing strategy and is maintaining its assumption of a target corridor of 1.0 to 2.5 as debt factor, interest cover (ratio of EBITDA to the interest balance) of at least 5, a liquidity reserve of around 100 million euros and an equity ratio of more than 50 per cent.


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