ZURICH (Reuters) - UPC, the Swiss arm of telecoms company Liberty Global (LBTYA.O) and target of a 6.3 billion Swiss franc ($6.5 billion) takeover bid by Sunrise Communications (SRCG.S), reported a narrower 3.6% fall in second-quarter revenue on Thursday.
Investors are scrutinizing UPC’s numbers to see whether the Sunrise bid, to be funded by a rights issue, is properly valued. Sunrise’s main shareholder, Germany’s Freenet (FNTGn.DE), has said it will not back the cash call.
The drop in revenue at the mobile phone, cable TV and internet provider followed contractions of 3.7% in the first quarter, 5.1% fall in the fourth quarter of 2018 and 6.3% in the third quarter.
Sunrise said UPC’s improvement in many areas showed its turnaround was gaining traction. “Developments are overall somewhat better than expected and thus we continue to back the acquisition fully,” Sunrise said.
Liberty Global had said on Wednesday the divestment remained on track to close in the fourth quarter of 2019.
“In the face of continued fierce competition and in line with expectations, revenue fell by 3.6% compared to the same quarter last year to a total of 315.6 million Swiss francs,” UPC said in a statement on Thursday.
UPC said positive trends for revenue and subscriber numbers had continued in the April-June period. It posted record sales in the Mobile segment and saw a continued increase of its UPC TV box in the customer base.
UPC Chief Executive Severina Pascu said the results were “pointing to an upward trend”.
The number of mobile subscribers rose by 14,000 from the first quarter to 173,000. The number of subscribers in the TV segment fell by 19,000 versus the previous quarter, slowing from falls of 23,000 in Q1 2019 and 32,000 in Q4 2018.
It had 9,000 fewer subscribers in the Internet segment, while its business customer segment grew in the first half.
Reporting by Michael Shields and Angelika Gruber, editing by John Revill and Alexander Smith