TDC Share Sale Unlikely This Year, Following Regulatory Move

(Reuters) – The private equity owners of Danish telecom group TDC (TDC.CO) are unlikely to go ahead with share offering before the fourth quarter of this year, after the sale of a Swiss unit was blocked by regulators, a minority institutional shareholder said on Thursday.

TDC’s main owners, five private equity investment firms, had been expected to launch a large stock offering this year, but the blocking of the sale of Swiss unit Sunrise to France Telecom (FTE.PA) and recent market turbulence have intervened.

“In my view it is unrealistic to expect TDC to list before the fourth quarter at the earliest,” Bjarne Graven Larsen, head of funds at Danish pension fund ATP said.

“They need at least two quarters to show that progress in the Swiss operations actually continues,” he said.

ATP, a more than 300 billion-crown ($48.55 billion) semi-public pension fund, owns 5.5 percent of TDC, which has retained a small free float on the Copenhagen exchange since the its 2006 private equity buyout for a record 100 billion crowns.

In April competition authorities halted TDC’s sale of mobile operator Sunrise in an 11 billion-crown ($1.78 billion) transaction that would have merged Sunrise with France Telecom’s Orange.

TDC and France Telecom said a week ago they had abandoned plans for the French group to buy Sunrise.

The failure of the deal raised questions about whether TDC’s main owners — Apax Partners, Blackstone Group (BX.N), Kohlberg Kravis Roberts [KKR.UL], Permira Advisers [PERM.UL] and Providence Equity Partners with 87.9 percent of TDC’s stock — would go ahead with a stock offering or shelve it.

A spokesman for that consortium of owners said: “We are continuing our work on the strategic review and will update the market as appropriate.”

But he declined to comment further.

Larsen said: “I see no reason why TDC could not list even though it still owns Sunrise.” He added that the main technical obstacle would be to rewrite the prospectus with a new set of numbers.

“This (the rejection of the Swiss deal) is obviously not a positive thing for the pricing of TDC when listing but it could make the share more interesting to some investors,” Larsen said.

Sunrise is the last remaining item in TDC’s non-Nordic portfolio, which has been sold off by private equity owners. TDC has made a succesful turnaround in its Swiss business, which Larsen said could provide future upside for the shares.

Danish ambulance services group Falck this week pulled the plug on its plans for a listing and share offering — at least for the time being — in the wake of financial market turmoil.  ($1=6.179 Danish crowns) (Reporting by Peter Levring; Editing by Greg Mahlich)