LONDON: A group of five private equity firms are in advanced talks to buy Danish telecoms operator TDC AS for about $11.6 billion, according to sources. The buyout group consists of British firms Apax and Permira along with U.S. companies Blackstone, Providence and Kohlberg Kravis Roberts & Co.
The acquisition, when happens, will be the largest ever to be made by private equity firms in Europe. Earlier, the Swiss government had prevented Swisscom from buying TDC and as such the consortium stands a good chance to clinch the deal.
Swisscom had been eyeing TDC in collaboration with a private equity group. It was also reported to be in talks with Irish telecoms operator Eircom. Surprisingly the Swish government had instructed its representative on the Swisscom board to block any acquisition attempts.
Analysts say there could be another suitor for TDC, a group comprising Cinven, BC Partners, Apollo Management and Silver Lake Partners.
Copenhagen-headquartered TDC operates fixed-line and mobile phone networks in Denmark, Switzerland, Germany, the UK and other European markets.
TDC and its suitors have not yet agreed on the final terms, according to sources close to the negotiations, but the consortium has done its homework well for the last 10 months and it is said to be strong on its fundamentals.
An initial agreement between TDC and Apax allows the former to accept a higher offer from another group.
Meanwhile, there are reports that five banks -- JP Morgan; CSFB; Deutsche Bank; Barclays Capital and Royal Bank of Scotland -- will finance the consortium to the extent of $10 billion for the deal. This could be in the form of debt and high-yield loans.
The takeover may not meet any resistance from the Danish government, but TDC's employee unions are said to be critical of the move.
TDC has some 84,000 individual shareholders, a majority of them private investors and employees, owning nearly 15 per cent of the equity. There are three institutional investors – U.S.-based Capital Group and Franklin and Denmark’s ATP – who together hold 5 per cent. One of these, ATP, had earlier rejected an approach from Apax to sell its stake.
Posted
on : Wed, 30 Nov 2005 10:25 GMT | Business News
By : Mark Richardson
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