Shares in Danish telecoms company TDC (TDC.CO) jumped more than 10 percent on Friday after it said it had rejected a potential takeover approach believed to be from private equity firm Apollo Global Management (APO.N).
TDC did not disclose who had made what it described as a highly preliminary approach but the name Apollo appeared in the title of an attachment in its press release.
Danish daily Borsen had reported earlier that Apollo had contacted TDC and hired Lazard and FIH Partners as advisers.
A spokesman from Apollo Global Management declined to comment, when contacted by Reuters.
“TDC reviewed the approach and concluded that it was financially inadequate, incomplete and not in the best interest of shareholders. Consequently, TDC has decided not to pursue it any further,” it said in a statement.
By 1100 GMT shares in TDC were up 8.8 percent at 35.40 crowns corresponding to a market capitalization of around 26.5 billion Danish crowns ($3.9 billion).
TDC is the biggest of four main players in a highly competitive Danish telecoms market. In January, it cut its dividend and forecast a fall in 2016 core earnings, fuelling speculation it could become a takeover target.
It was previously controlled by NTC Holding, a consortium of investment firms Apax Partners, the Blackstone Group LP (BX.N), Kohlberg Kravis Roberts [KOHLB.UL], Permira Advisers and Providence Equity Partners.
Investment bank Berenberg said in a note to clients it would make sense for TDC to return to the hands of a private equity (PE) firm.
“If PE buys TDC and swap TDC’s current bond with PE’s shareholder bonds, it can milk up to 10 percent dividend in Denmark where bank rate is close to 0 percent,” it said.
Analysts from both Berenberg and Alm. Brand Markets said a private equity firm could pay between 40 and 45 Danish crown per share.
Alm. Brand Markets analyst Michael Friis Jorgensen said a telecom firm likely will be able to pay a higher price for TDC than a private equity firm that would be forced to issue bonds to pay for deal.