They found their target.
Group Launches $12 Billion Bid for TDC
Wednesday November 30, 11:03 am ET
By Jan M. Olsen, Associated Press Writer
Private Equity Group Launches $12B Bid for TDC; Recommends Shareholders Accept the Offer
COPENHAGEN, Denmark (AP) -- A group of private equity firms launched a 76 billion kroner ($12 billion) cash offer for TDC A/S, and Denmark's largest telecom operator said Wednesday its board recommended that shareholders accept the bid.
The suitor is a group including Apax Partners, Permira Advisors, Blackstone Group, Kohlberg Kravis Roberts & Co. and Providence Equity, and the deal would be one of the biggest takeovers by a private equity group in Europe.
The announcement came after months of speculation that several private equity groups were interested in buying TDC, which provides local and long-distance services, Internet access and cell phone service in Denmark and elsewhere in Europe.
"We have received an offer and we believe it was so attractive that we have presented it to the shareholders," TDC chairman Thorleif Krarup said.
The offer is for 382 kroner ($60) per share, 5.5 percent higher than TDC's closing price Tuesday and well above the level of 237.25 kroner at the start of the year. TDC shares rose 4.7 percent Wednesday to 378.50 kroner ($59.91) on the Copenhagen exchange.
Poul Jessen, an analyst at Danske Bank, said TDC was likely chosen as a takeover target because it is one of the few major European telecom operators in which the government does not hold a majority share.
He said the price of the offer had been expected, but that he still considered it steep.
"I think it's a high price to pay for TDC," Jessen said. "If these guys believe they can make a return on buying TDC (at this price) then the whole (telecom) industry should be undervalued. ... If they see something that nobody else is seeing, then you can mention close to almost any operator in Europe that people should buy into."
More details of the offer will be presented Friday or Monday, said Kurt Bjorklund, a spokesman for Nordic Telephone Co., or NTC, a company established by the five private equity firms to handle the transaction.
The board's recommendation doesn't preclude it from entering discussions with other potential buyers, the Copenhagen-based company said.
"Under Danish law, we're obliged to look at any other bids," Krarup said, adding that TDC was not actively looking for other offers.
A second group of private equity firms, including U.S.-based Silver Lake Partners, has been examining TDC's finances to decide whether it, too, will make an offer for the company, The Wall Street Journal reported.
Denmark's four regional telephone companies were merged in 1995 into one called Tele Danmark, which was owned by the Danish state. Two years later, Chicago-based Ameritech bought 42 percent of the shares in Tele Danmark.
The privatization process was completed in 1998, when Tele Danmark bought the remaining shares from the Danish state.
Tele Danmark changed its name to TDC in 2000 to sharpen its international profile. U.S. phone company SBC Communications Inc., which had taken control over Ameritech in 1999, sold its shares in 2004.
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