TDC board recommends Apax and KKR-led bid

If accepted by the Danish telecoms company’s shareholders, the €10 billion deal would be the largest private equity buyout yet seen in the Nordic region.

A holding company owned by a private equity consortium is to buy TDC, Denmark’s largest telecom operator, for DKK 76 billion (€10 billion; $12 billion).

Nordic Telephone Company, which is owned by Apax Partners, Kohlberg Kravis Roberts, Permira, Blackstone Group, and Providence Equity Partners, announced yesterday that TDC’s board would be recommending its DKK 382 per share offer for the company’s stock to its shareholders. The offer represents a 5.5 percent premium to the price of DKK 362 at which TDC shares closed on Tuesday.

The buyout is reportedly backed by $10 billion (€8.5 billion) of senior debt and high-yield loans provided by JP Morgan, CSFB, Deutsche Bank, Barclays Capital and Royal Bank of Scotland. As well as bidding for the company’s equity, Nordic has said that it plans to buy back the majority of its existing bonds at 100 percent of face value.

TDC’s shares had jumped 5.1 percent to DEK 380.5 by 8am today.

Private equity buyers have been attracted to TDC by a number of international units which can be sold on and by its strong cash flow, which stood at DKK 7.1 billion during the first three quarters of this year. A separate consortium including Cinven and BC Partners is thought to have also bid for the company.

The deal could yet meet resistance, however. Dansk Metal Union, a Danish trade union that has about 11,000 members employed by TDC, has said that it was worried about asset stripping and job losses, and has promised the buyers “a fight to the finish”.

This year has seen private equity buyers make unsuccessful bids for telecoms companies. Italy’s Wind was ultimately bought by Egyptian businessman Naguib Sawiris, while Spain’s Amena and Austria’s Tele.ring Telekom Service were sold to trade buyers.