Sunrise Jumps After Biggest Swiss IPO in Eight Years

by Cornelius Rahn

A Sunrise employee speaks on an Apple Inc. iPhone at the Sunrise headquarters in Zurich. Switzerland’s second-largest wireless operator raised 2 billion Swiss francs ($2.2 billion) in the biggest initial public offering on the country’s stock exchange in eight years. Photographer: Gianluca Colla/Bloomberg

(Bloomberg) -- Sunrise Communications AG rose on its trading debut after Switzerland’s second-largest wireless operator raised 2 billion Swiss francs ($2.2 billion) in the biggest initial public offering on the country’s stock exchange in eight years.
The shares added as much as 6.6 percent and traded 2.4 percent higher at 70.75 francs as of 9:29 a.m. in Zurich. Sunrise and its shareholders sold 29.3 million shares at 68 francs a share, according to a statement today. That’s the midpoint of the original IPO price range of 58 to 78 francs, which was later narrowed to 65 to 70 francs.
The IPO price valued Sunrise at 3.1 billion francs. The phone company has said it plans to use the proceeds to cut debt and strengthen its balance sheet. CVC Capital Partners’s stake
will drop to as little as 25 percent if an over-allotment option, or greenshoe, is fully exercised, Sunrise spokesman Markus Werner said by e-mail. Without the greenshoe, the stake will be 35 percent.

Competition is heating up in Switzerland where Swisscom AG, the dominant phone company, offers flat rates for mobile subscriptions for 59 francs to 169 francs a month. Billionaire Xavier Niel, known for sparking a cellular price war in France, agreed to buy third-place carrier Orange Switzerland for 2.8 billion francs in December. CVC agreed to pay 3.3 billion francs for Sunrise in 2010.
The IPO included 20 million new shares. The greenshoe amounts to 4.1 million existing shares that can be added to the offer until March 8, Sunrise said today. CVC and Sunrise’s board won’t be able to sell shares for six months and the company itself won’t be able to do so for a year.
Deutsche Bank AG and UBS AG were joint global coordinators and joint bookrunners for the IPO. Morgan Stanley and Berenberg were additional joint bookrunners, and Bank Vontobel AG was co-lead manager. Lilja & Co. is an independent adviser to CVC and Sunrise.