After a four-year hiatus, Sunrise’s shares can be traded on the Swiss stock exchange once again. The company aims to leverage its dividend policy to attract investors.
A store of the telecommunications company Sunrise in Glattbrugg.
After nearly four years of absence, Sunrise returned to the Swiss stock exchange on Friday. The stock opened at 44.75 Swiss Francs at the start of trading. This gives the company a market capitalization of around 3.1 billion Swiss Francs, making it one of the largest IPOs globally this year.
Throughout the day, Sunrise’s stock price fluctuated slightly above or below the offering price, but eventually fell in the afternoon. By the end of trading, the price stood at 41.80 Swiss Francs.
This is the second time Sunrise has ventured to the Swiss stock exchange. The first time was in 2015 when Sunrise was solely a mobile provider. In 2020, the company was acquired by the international conglomerate Liberty Global and merged with the cable network operator UPC. This expansion added TV and landline services to the mobile offerings.
“Sunrise is better and stronger than ever,” stated André Krause, CEO of Sunrise, in a press release. Krause had previously been part of the company during its first IPO nine years ago, serving as the CFO at that time.
To facilitate the merger with UPC, Liberty Global delisted Sunrise from the stock exchange in 2021. The integration process has since been completed, with the UPC brand disappearing, customer bases merged, IT systems consolidated, and excess staff laid off. This prompted Liberty Global to spin off its Swiss subsidiary.
Complex Allocation Process
Sunrise’s return to the stock exchange is not a traditional IPO with capital raising. Existing Liberty Global shareholders received subscription rights that started trading on the Nasdaq technology exchange on Wednesday. These rights allow Liberty shareholders to convert and sell Sunrise shares on the Swiss stock exchange.
Sunrise now has two categories of shares, with only the Class A shares trading under the ticker symbol “SUNN” on the Swiss stock exchange. Liberty Global shareholders received one Class A share of Sunrise for every five Liberty shares they held.
Additionally, there is a Class B category of shares that are not publicly traded and carry ten times the voting rights. Most of these shares are allocated to Liberty Global executives John Malone and Mike Fries, who collectively own about a quarter of Sunrise. Fries will also chair Sunrise’s board of directors. This ownership structure may deter potential investors.
Sunrise’s high debt compared to its competitor Swisscom is also a concern for investors. In order to reduce this debt, Liberty Global invested 1.2 billion Swiss Francs before the spin-off.
Sunrise Tempts with “Progressive Dividend Policy”
Sunrise attracted investors with the promise of a generous dividend. By 2025, the company plans to distribute at least 240 million Swiss Francs in dividends. Furthermore, Sunrise aims to maintain a “progressive dividend policy” in the future, as stated in a press release.
Sunrise also pledges to continue growing in the future. This is ambitious given the stagnant revenues in the telecom market. Sunrise’s revenue, for example, decreased by 0.2 percent from 2022 to 2023, amounting to 3.03 billion Swiss Francs.
Rather than solely competing with Swisscom, Sunrise aims to deepen relationships with existing customers by offering additional packages. Additionally, Sunrise sees opportunities for growth in the business customer segment.