freenet AG: Clarification of voting behaviour in the Board of Directors of the Sunrise

Dear Fellow Sunrise Shareholders,  

As member of the Board of Directors of Sunrise, we would like to set the record straight about our position relating to Sunrise's proposed transaction and correct Sunrise's reporting that we changed our opinion on the transaction overtime. As part of their efforts to pursue support for the proposed transaction, Sunrise has chosen to disclose confidential board and board committee discussions in an attempt to somehow discredit our service on the Board of Directors of Sunrise. However, their statement that we changed our perspective on the merits of the transaction during this process is patently not true and their selective disclosure therefore only serves to further mislead shareholders. While we believe that board discussions should remain confidential, we feel compelled in this case to provide Sunrise shareholders with the facts as clearly as possible within legal boundaries.  

We made our concerns about an all-cash structure for UPC very clear to the Board of Directors of Sunrise from the outset and have remained consistent in our view throughout. While we agreed with a continuation of the negotiation process in the early stages to explore whether alternative terms could be agreed, it is misleading and incorrect for Sunrise to present this as having been "supportive" of the all-cash-deal. In fact, on two separate occasions in January 2019 at the Board of Directors of Sunrise (once the unfavourable deal terms became more tangible), we voted against the deal due to its structure and shared our opposition publicly. And ultimately, when the proposed deal was presented to the Board of Directors for final approval, we voted against.  

We have been consistent in our opposition from the outset and, as more information has become available, our opposition has only strengthened. From our extensive experience in the telecoms sector and detailed review of the proposed deal, it is clear to us that the UPC Switzerland transaction is not in the best interests of Sunrise and its shareholders and thus should be rejected at this month's EGM.  

- Since the deal's announcement in January, Sunrise's share price has declined and we fear there will be further downside if the transaction were to move ahead  

- We question the sustainability of the cable industry and believe that its decline across markets will only accelerate as the switch to 5G becomes mainstream  

- The deal is expensive and given the cable industry's as well as UPC's challenges, Sunrise shareholders will pay too much for UPC Switzerland  

- The deal's all-cash structure is not in the best interest of Sunrise and its shareholders  

- Sunrise will continue to thrive as a stand-alone company and there are more cost-effective alternatives than UPC Switzerland to further drive convergence  

We remain committed to the best interests of Sunrise and its shareholders and therefore consistent in our opposition to the proposed deal. Increasing the value of Sunrise is in the interest of all its shareholders. We are not the only shareholder that has been public in their opposition, and encourage all shareholders to oppose the UPC Switzerland transaction and the corresponding capital increase on 23 October 2019.  

Best regards,  

Christoph Vilanek                                                          Ingo Arnold CEO of freenet AG                                                         CFO of freenet AG Member of the Board of Directors of                                Member of the Board of Directors of Sunrise Communications Group AG                                 Sunrise Communications Group AG (since April 2016)                                                         (since April 2019)