TDC backs away from MTG deal after new bidder emerges

Monday 12 February 2018 | 11:50 CET | News
Update: 12 February 2018 | 12:57 CET

Denmark's TDC Group intends to withdraw its recommendation for merging the company with MTG Nordic Entertainment and MTG Studios. TDC said it has been approached by a potential bidder for all of its shares, and that if this party does indeed go ahead and make an offer, the board of directors would withdraw its backing for the earlier agreed transaction with MTG. TDC said there can be no certainty that the discussions will in fact lead to the potential bidder making an offer.

Last week, TDC said that it had rejected a takeover proposal from a group comprising pension funds PFA Pension and Forsikringsselskab, PKA and ATP and Macquarie Infrastructure & Real Assets Europe. It said at the time that the offer was not in the best interest of TDC’s shareholders and stakeholders and that it was confident in its stand-alone prospects and the value to be created from the proposed MTG deal.

According to a report by Danish newspaper Borsen, the bidders were ready to pay around DKK 47 per share for TDC, compared with its share price at the time of around DKK 37. 

The consortium said it aimed to reduce infrastructure duplication and accelerate the expansion of telecommunications networks across Denmark. It would invest significantly in the network infrastructure and also look to cooperate with energy companies to bring gigabit broadband to all of Denmark by the mid-2020s.

In an article on its news website, Danish public broadcaster DR cites a Sydbank analyst as speculating that the potential bidder mentioned is probably a new one, otherwise TDC would have worded its new statement differently. This could be a capital fund that has had a previous approach rejected, he said. On the other hand, he said, it could be a major operator from within the sector, such as Telia, which was reported to have shown an interest earlier.

An article on Swedish business newspaper DI’s website claimed that Telia held discussions with TDC last week, citing several sources. They said the talks concerned a bid of approximately SEK 80 billion for the Danish company.

Telia Company noted the rumours in the market and asserted that it is not currently holding any discussions with TDC about a potential acquisition. It did say that in has looked at various different alternatives for its strategy in Denmark, and that that buying TDC had been one of the scenarios that it had examined.

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