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December 09, 2010, 5:17 AM EST
By Diana ben-Aaron
(Updates with comment from analyst in fourth paragraph.)
Dec. 9 (Bloomberg) -- TDC A/S, Denmark’s largest telephone operator, said shares being sold by its private-equity majority owners were priced at 51 kroner apiece, valuing the company at 41.5 billion kroner ($7.4 billion) after a share buyback.
Apax Partners LLP, Blackstone Group LP, KKR & Co., Permira Advisers LLP and Providence Equity Partners Inc. are recouping part of the investment they made when they bought an 88 percent stake in TDC in 2006 in a transaction worth about $15.3 billion, including net debt. The companies had offered shares in a price range of 47 kroner to 56 kroner.
The completion of the sale will cut the majority owners’ holdings to between 55 percent and 59 percent of the outstanding TDC shares, Copenhagen-based TDC said in a statement. About 84 percent of the shares are being sold to institutional investors and the remainder to Danish retail investors.
“It’s a fair pricing in the sense that most people looking at the sector would come up with a relative valuation in the middle of the range,” said Sven Skold, a Stockholm-based analyst at Swedbank. “The sector as a whole is a little too cheap because price-earnings multiples are not far from seven- year lows, interest rates are exceptionally low, and capex seems to be maintained at relatively low levels.”
The companies will sell 210 million shares and possibly 31.5 million additional shares in an overallotment. Payment and settlement are planned for Dec. 13.
TDC fell as much as 4.3 percent and traded 3.8 percent lower at 50.05 kroner as of 11:12 a.m. in Copenhagen trading.
Rapid Growth
The buyout firms are selling a stake as investors seek dividend yields from European telecommunications stocks after years of rapid growth and overseas acquisitions. TDC Chief Executive Officer Henrik Poulsen has promised to return 80 percent to 85 percent of free cash flow to investors in dividends. The Copenhagen-based company plans to pay a dividend of 4.35 kroner a share in 2011.
“The company’s much smaller today than when the private equity firms bought it,” Swedbank’s Skold said. “It’s sold a lot of assets and given out significant dividends over the years, so there are reasons for the lower market cap today. It’s been a very good investment for them.”
TDC sold its last remaining non-Nordic unit, Sunrise Communications AG, to CVC Capital Partners for 3.3 billion Swiss francs ($3.4 billion) in October. The company previously divested Invitel Holdings A/S, previously Hungarian Telephone and Cable Corp., to Mid Europa Partners in 2009. It sold a stake in Polkomtel SA to Vodafone Group Plc and a group of Polish companies in 2008.
The company paid regular and special cash dividends of 7.85 kroner in 2009 after adjusting for a stock split, Bloomberg data show. It hasn’t paid a dividend this year.
JPMorgan Chase & Co., Morgan Stanley and SEB AB are managing the share sale as global coordinators, while Deutsche Bank AG and UBS AG are also acting as bookrunners.
--Editors: Robert Valpuesta, David Risser.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net
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(Updates with comment from analyst in fourth paragraph.)
Dec. 9 (Bloomberg) -- TDC A/S, Denmark’s largest telephone operator, said shares being sold by its private-equity majority owners were priced at 51 kroner apiece, valuing the company at 41.5 billion kroner ($7.4 billion) after a share buyback.
Apax Partners LLP, Blackstone Group LP, KKR & Co., Permira Advisers LLP and Providence Equity Partners Inc. are recouping part of the investment they made when they bought an 88 percent stake in TDC in 2006 in a transaction worth about $15.3 billion, including net debt. The companies had offered shares in a price range of 47 kroner to 56 kroner.
The completion of the sale will cut the majority owners’ holdings to between 55 percent and 59 percent of the outstanding TDC shares, Copenhagen-based TDC said in a statement. About 84 percent of the shares are being sold to institutional investors and the remainder to Danish retail investors.
“It’s a fair pricing in the sense that most people looking at the sector would come up with a relative valuation in the middle of the range,” said Sven Skold, a Stockholm-based analyst at Swedbank. “The sector as a whole is a little too cheap because price-earnings multiples are not far from seven- year lows, interest rates are exceptionally low, and capex seems to be maintained at relatively low levels.”
The companies will sell 210 million shares and possibly 31.5 million additional shares in an overallotment. Payment and settlement are planned for Dec. 13.
TDC fell as much as 4.3 percent and traded 3.8 percent lower at 50.05 kroner as of 11:12 a.m. in Copenhagen trading.
Rapid Growth
The buyout firms are selling a stake as investors seek dividend yields from European telecommunications stocks after years of rapid growth and overseas acquisitions. TDC Chief Executive Officer Henrik Poulsen has promised to return 80 percent to 85 percent of free cash flow to investors in dividends. The Copenhagen-based company plans to pay a dividend of 4.35 kroner a share in 2011.
“The company’s much smaller today than when the private equity firms bought it,” Swedbank’s Skold said. “It’s sold a lot of assets and given out significant dividends over the years, so there are reasons for the lower market cap today. It’s been a very good investment for them.”
TDC sold its last remaining non-Nordic unit, Sunrise Communications AG, to CVC Capital Partners for 3.3 billion Swiss francs ($3.4 billion) in October. The company previously divested Invitel Holdings A/S, previously Hungarian Telephone and Cable Corp., to Mid Europa Partners in 2009. It sold a stake in Polkomtel SA to Vodafone Group Plc and a group of Polish companies in 2008.
The company paid regular and special cash dividends of 7.85 kroner in 2009 after adjusting for a stock split, Bloomberg data show. It hasn’t paid a dividend this year.
JPMorgan Chase & Co., Morgan Stanley and SEB AB are managing the share sale as global coordinators, while Deutsche Bank AG and UBS AG are also acting as bookrunners.
--Editors: Robert Valpuesta, David Risser.
To contact the reporter on this story: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net
To contact the editor responsible for this story: Vidya Root in Paris at vroot@bloomberg.net
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