Liberty Global Sunrise Spin-off Notes

March 19, 2024 Update

On February 16, 2024, Liberty Global (LBTYA) announced that it will spin off 100% of Sunrise, its Swiss Telecom company. The spin-off transaction is expected to take place in the second half of 2024.

This Reuters article gives a nice brief overview of the situation. Liberty looks very interesting. Management believes that it is trading at a 50%+ discount to its fair value. It outlines its logic on slide 17 of the recent earnings presentation. Management is aggressively trying to close the gap to fair value but the stock has not really reacted. In fiscal 2023, the company bought back 18.5% of shares outstanding. Since 2017, it has repurchased ~60% of shares outstanding. It expects to buy back another 10% in F2024.

And depending on the valuation of Sunrise, the spin-off could generate $5 to $10 per share of equity value. This is meaningful given Liberty currently trades at ~$18. More work to do, but this looks interesting.