Sunrise cancelled an EGM scheduled for shareholders to vote on a key financial element in its bid to acquire cable operator UPC Switzerland from Liberty Global, casting doubt on the Swiss operator’s ability to proceed with the transaction.

The EGM was due to take place tomorrow (23 October), with shareholders scheduled to discuss an ordinary capital increase amounting to CHF2.8 billion ($2.8 billion) through a rights offering. In a statement, Sunrise explained the proceeds would have contributed to its overall financing of the proposed CHF6.3 billion acquisition.

Sunrise cancelled the meeting when it became clear “that the majority of shareholders” registered to vote in the EGM “do not support the capital increase”.

The operator specifically cited a decision by its largest shareholder, Freenet, not to back the deal as a factor in the cancellation. Freenet had previously criticised the purchase price and structure of the acquisition, though subsequently indicated it was willing to work through these issues with Sunrise’s management despite what it regarded as “unacceptable behaviour” by the operator.

Sunrise stated a share purchase agreement with Liberty Global stands and will continue to do so until 27 February 2020 unless one of the parties seeks a termination.

In a related statement, Liberty Global highlighted some “minor amendments” to the agreement, specifically “the flexibility to convene a new EGM and certain adjusted termination rights”. Commitments made by the company as part of a conditional rights purchase agreement “will lapse and thereby terminate”.

Sunrise’s board also dropped motions to remove chairman Peter Kurer and board member Jens Jesper Ovesen, which were also on the EGM agenda.

Kurer made no reference to this in the statement, noting only that Sunrise regretted cancelling the meeting: “We have spent a significant amount of time engaging with our shareholders and continue to believe in the compelling strategic and financial rationale of the acquisition.”