(Reuters) – Private equity firm Kohlberg Kravis Roberts & Co (KKR) (KKR.N: Quote, Profile, Research, Stock Buzz) has sold its 11 percent stake in Danish telecoms firm TDC (TDC.CO: Quote, Profile, Research, Stock Buzz) for $744 million, taking advantage of a recent surge in telecoms stocks to make a long-expected exit from the business.
KKR said on Friday it sold around 90 million shares to institutional investors at 46.3 Danish crowns per share, a 3 percent discount to Thursday’s closing price.
It did not disclose what it would use the 4.17 billion Danish crowns ($744 million) of proceeds for, nor how this compared with its original investment in the business.
KKR was part of the private equity consortium NTC which bought 88 percent of TDC for around 67 billion crowns in 2006.
NTC sold 28.8 percent of the stock in 2010 and has since reduced its stake several times. In April, it sold all of its remaining TDC shares except for those owned by KKR, and analysts had expected KKR to sell its stake this year.
Alm. Brand Bank analyst Michael Friis Jorgensen said KKR had got a good price, taking advantage of a recent increase in interest in Europe’s telecoms sector amid a wave of deals.
The recently announced $130 billion deal between Verizon Communications Inc (VZ.N: Quote, Profile, Research, Stock Buzz) and Vodafone Group Plc (VOD.L: Quote, Profile, Research, Stock Buzz), combined with the EU Commission’s new plan to cap the cost of phone calls could spark more deals in Europe, Jorgensen said.
He said the EU plan would also create a single European telecoms market if it were to be implemented in its current form.
“TDC would be a small player in such a market and it would be very difficult for them. So I think TDC will take part in some sort of consolidation in the long term,” Jorgensen said.
TDC has said it is willing to participate in consolidation if it is in the best interest of its shareholders.
Nordea said in a note to clients that KKR’s share placement would put a downward pressure on TDC’s share price on Friday, but kept a recommendation to buy TDC shares, saying the company could become an acquisition target.
A trader told Reuters the sale could have a positive effect for TDC’s share price in the longer term as the risk of a large placement of stock in the market was now gone.
JP Morgan acted as sole bookrunner on the transaction, KKR said in a statement.
TDC shares, which have risen about 20 percent so far this year, were down 3.1 percent to 46.41 crowns at 1105 GMT.