European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

Liberty Global Bids for Sunrise Communications – the Buyer Becomes the Seller

Event-Driven

Sunrise Communications Group A / Event-Driven

<a href="https://www.smartkarma.com/entities/liberty-global-plc-a" target="_blank" data-smartkarma-citation="entities:15261:1" rel="noopener">Liberty Global Plc A (LBTYA US)</a> Global has launched an all cash friendly voluntary takeover offer for <a href="https://www.smartkarma.com/entities/sunrise-communications-group-a" target="_blank" data-smartkarma-citation="entities:22491:1" rel="noopener">Sunrise Communications Group A (SRCG SW)</a> at a price of CHF 110 per share for the whole share capital.
<ul>
<li>This follows the failed attempt by Sunrise to acquire Liberty’s Swiss business (UPC Switzerland) in 2019.</li>
</ul>
The deal makes strategic sense for Liberty: Switzerland has shown weak operating performance and KPIs in the recent past.  A combination would also give Sunrise access to a comprehensive, high-capacity network that shortcuts infrastructure building, especially to support mobile network densification for 5G.
The telecommunications sector in Europe is one of the few sectors where mergers and acquisitions are growing, in a year marked by the coronavirus pandemic. According to Bloomberg data, operations for EUR 43 bn have been closed, 9.1% higher than the same period last year.
The deal is underpinned by significant expected total synergies of CHF 3.1bn on a NPV basis after integration costs, with the annual run rate of cost, capex and revenue synergies estimated at CHF 275mn.
Management of both Liberty and Sunrise do not expect any resistance from the competition authorities given that at the first attempt to combine both businesses the Swiss competition watchdogs granted approval without any conditions or requirements.
Sunrise is trading at a 0.64% gross spread, c. 2.8% annualised, which reflects the high chances of this deal completing. Although it is hard to get too excited about the return, it seems a rock-solid trade.

Liberty Global Plc A (LBTYA US) Global has launched an all cash friendly voluntary takeover offer for Sunrise Communications Group A (SRCG SW) at a price of CHF 110 per share for the whole share capital.

This follows the failed attempt by Sunrise to acquire Liberty’s Swiss business (UPC Switzerland) in 2019.

The deal makes strategic sense for Liberty: Switzerland has shown weak operating performance and KPIs in the recent past.  A combination would also give Sunrise access to a comprehensive, high-capacity network that shortcuts infrastructure building, especially to support mobile network densification for 5G.
The telecommunications sector in Europe is one of the few sectors where mergers and acquisitions are growing, in a year marked by the coronavirus pandemic. According to Bloomberg data, operations for EUR 43 bn have been closed, 9.1% higher than the same period last year.
The deal is underpinned by significant expected total synergies of CHF 3.1bn on a NPV basis after integration costs, with the annual run rate of cost, capex and revenue synergies estimated at CHF 275mn.
Management of both Liberty and Sunrise do not expect any resistance from the competition authorities given that at the first attempt to combine both businesses the Swiss competition watchdogs granted approval without any conditions or requirements.
Sunrise is trading at a 0.64% gross spread, c. 2.8% annualised, which reflects the high chances of this deal completing. Although it is hard to get too excited about the return, it seems a rock-solid trade.

Liberty - Sunrise: Another Deal in a Hot European Sector