Swiss operator Sunrise announced that Liberty Global will invest up to CHF 500 million in a combination of tradable rights and subsequent subscription of newly issued shares in the capital increase to finance the acquisition of UPC Switzerland. This was a demand of some Sunrise shareholders, who found the price of the takeover too high, and called for Liberty Global to share in the risk of merging the two operators.

As a result of the new terms, Liberty Global will hold a 7.8 percent stake in Sunrise at current market prices, and Sunrise will provide Liberty Global with the right to propose a representative for election to its board of directors at the next AGM. The terms of the takeover of UPC worth CHF 6.3 billion remain unchanged.

Mike Fries, CEO of Liberty Global, believes that the combination will create a challenger to Swisscom in the market, while Sunrise is convinced that investment in the rights issue by Liberty Global will lessen the financial commitment needed from its shareholders. Sunrise's shareholders will vote on 23 October to approve the capital increase.

The Swiss regulatory authority, WEKO, has approved the deal without conditions, citing the fact that it will create the second largest telecommunications carrier in Switzerland and that the combination will stimulate competition.

Meanwhile,proxy advisors Glass Lewis, Ethos and zRating have announced their support for the proposed capital increase to finance the acquisition of UPC Switzerland.

Last week, proxy adviser ISS recommended that shareholders of Sunrise should reject the proposal for a capital increase. ISS noted that the "fair value"of UPC ranges from CHF 4.6 to CHF 5.2 billion, making the current valuation of CHF 6.3 billion excessive. Sunrise replied in a statement that the ISS report is misleading because of valuation inconsistencies and factual errors that misrepresent the long-term benefits to Sunrise shareholders. Liberty Global said that the report issued by ISS is "flawed" and the adviser"demonstrated a surprisingly poor understanding of the telecom industry".

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