GN Store Nord Shares Jump as Vienna Arbitration Court Awards $380 Million

GN Store Nord A/S, the world’s largest maker of headsets, rose to its highest price in more than two months after an arbitration court awarded the Danish company an amount equal to one quarter of its market value.

GN rose as much as 8.5 percent to 46 kroner, the highest since June 24, after the Ballerup, Denmark-based company said Sept. 3 that the arbitration tribunal in Vienna ordered Telekomunikacja Polska SA to pay GN around 2.2 billion kroner ($380 million) for installing a fiber-optic transmission system. TDC A/S, Denmark’s largest phone company, will get 700 million kroner for its 25 percent stake in DPTG I/S, the joint venture that did the work.

GN said DPTG will now make a second claim seeking funds from the period 2004 to 2009 as the ruling only covered the previous ten years. GN Chairman Per Wold-Olsen said the company will repay debt and considers “strategic options.” Its dividend and share buyback policies don’t take an award into account.

“We believe an accelerated share buyback program or a special dividend will be proposed in order to return much of the cash to shareholders,” Ingeborg Oeie, an analyst at Jefferies International Ltd., said today in an investor note.

TPSA, Poland’s biggest phone company, is analyzing legal steps to overturn the arbitration court’s ruling and will announce them as soon as possible, the Warsaw-based company said in a regulatory statement.

The awarded amount represents 58 percent of the 5 billion kroner GN and TDC had sought. Under the 1991 contract, TPSA agreed to pay 14.8 percent of profits from 15 years of traffic over the transmission system. The companies disagreed over how to measure the traffic and calculate payments.

GN rose 2.9 kroner, or 6.8 percent, to 45.30 kroner at 9 a.m., giving it a market value of 9.58 billion kroner. GN’s market value was 8.83 billion kroner at end of Sept. 3 and the company had total assets of 7.8 billion kroner as of June 30.

TPSA shares fell 4.1 percent to 16.40 zloty at 9:02 a.m. on the Warsaw Stock Exchange, the biggest decline since June 15.

To contact the reporter on this story: Frances Schwartzkopff at fschwartzko1@bloomberg.net

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