Major shareholder rejects €10bn TDC offer

ATP, the Danish pension fund that owns a 5.5% stake in TDC, has thrown the buyout of the Danish telecom firm into doubt by rejecting a private equity consortium’s bid.

ATP, Denmark’s largest pension fund, has rejected the €10 billion ($12 billion) offer for telecom company TDC that was submitted last month by a private equity consortium.

The Nordic Telephone Company (NTC) consortium – which comprises Apax Partners, Blackstone Group, Kohlberg Kravis Roberts, Permira and Providence Equity Partners – made a DKK 382 per share offer for the company’s stock, which was duly recommended by the TDC board of directors.

However, ATP issued a statement yesterday saying that it did not consider the offer “sufficiently attractive compared with the alternative of seeking to carry through initiatives already proposed by TDC management.”

NTC issued a statement of its own earlier today saying that it still believed its bid was “highly attractive”. It pointed out that the offer implied a 44.7 percent premium relative to TDC’s share price over the three months prior to the target’s acknowledgement to the market that it was in sale talks.

The offer is due to expire on 12 January, and it will not be known until then whether other investors in TDC have decided to follow ATP’s lead. NTC requires 90 percent shareholder approval for the bid to proceed – which would then trigger the delisting of TDC from the Copenhagen Stock Exchange.

A report in Dow Jones speculated that if NTC does not reach the 90 percent threshold, it is still expected to proceed with the purchase. However, until acceptances reached that level, TDC would remain listed and would continue to pay stock exchange fees and meet disclosure requirements.

The deal is reportedly backed by €8.5 billion ($10 billion) of senior debt and high yield loans provided by JP Morgan, CSFB, Deutsche Bank, Barclays Capital and Royal Bank of Scotland.