TDC accepts $6.6bn takeover offer from Macquarie as Telia denies interest

James Pearce
Published on:

TDC has agreed to an improved offer from Macquarie Group and three Danish pension funds on the same day Telia denied any interest in the Danish operator

TDC has agreed a $6.6 billion takeover on the same day Telia Company has denied reports it is holding talks with its Danish rival about a merger.

The accepted bid from Macquarie and three Danish pension funds came after the Danish firm had rejected an earlier approach.

Earlier, Telia admitted that part of its strategic review into operations in Denmark had involved it looking into several options which include a possible takeover of the former Tele Danmark Communications but said it is not currently holding talks.

The statement came as reports from Denmark business daily Dagens Industri (DI) claimed Telia execs had held talks as recently as last week, citing sources close to the process.

The talks had reportedly seen Telia discussing potential bid levels to buy TDC, although one of the sources told the newspaper that Telia’s interest had cooled after a sharp rise in TDC’s stocks. The rise came after the Danish outfit said it had turned down a $6 billion approach from Macquarie and three Danish pension funds. TDC has now accepted an improved offer.

Pierre Danon, chairman of TDC, said:”After careful review of our options, the board of directors of TDC believes that the consortium’s offer represents both the most compelling value and the highest transaction certainty benefitting the TDC shareholders. As a result, we have decided to recommend that the shareholders of TDC accept the offer."

Speculation around TDC had continued this week after TDC confirmed of a potential bid for all its shares that, it said, would stop its planned $2.5 billion acquisition of parts of Modern Times Group, a Swedish entertainment business.

TDC said that if a potential bidder followed through with a solid offer, it would withdraw from the MTG deal.

The $6.6 billion offer from Macquarie marks a 30% premium on the last week's closing share price, according to reports – a significant decline in the value of TDC since it was sold for €13 billion to five private equity firms in 2005 in one of Europe’s largest leveraged buyouts.

The speculation about Telia comes as it is focusing on Scandinavia and the Baltics, selling off assets in other regions. Telia has cut its holding in Russia’s MegaFon from 25.2% to 19.2%, raising the equivalent of $388 million. That move came just two weeks after Telia cut its holding in Turkcell.