The private-equity owners of TDC A/S (TDC) are weighing a sale of part of their stake in the Danish phone company, people familiar with the situation said, allowing them to return funds as European equity markets rebound.
Apax Partners LLP, Blackstone Group LP (BX), KKR & Co., Permira Advisers LLP and Providence Equity Partners Inc. may opt to cut their stake through a block sale of TDC shares in the next couple of months, according to the people, who declined to be identified because the talks are private. A sale would depend on the performance of TDC stock, which is already publicly traded, the people said.
While a partial sale is most probable, the private equity firms have also discussed with investment banks a sale of their entire stake to either private equity or strategic buyers, some of the people said.
The rally in European stock markets may make it easier, and more attractive, for buyout firms to cash out their stakes. The benchmark Stoxx Europe 600 Index has risen more than 22 percent since late September, an indication that stocks have entered a bull market. Permira is currently raising capital for its 6.5 billion euro ($8.6 billion) Permira V fund, and Apax for its 9 billion euro Apax Europe VIII, according to the London-based research firm Preqin.
The five firms currently own 59 percent of TDC, Denmark’s largest telephone operator, after taking an 88 percent stake in 2006 in what was then Europe’s largest leveraged buyout. TDC shares were trading at 44.90 Danish kroner yesterday, down 2 percent from a year ago, giving the company a market capitalization of 37 billion kroner ($6.6 billion) and valuing the private equity firms’ stake at $3.9 billion.
Lasse Bastkjaer Jensen, a spokesman for TDC, declined to comment, citing a company policy on market rumors.
The buyout firms will probably go ahead with a secondary equity offering if TDC’s shares rise closer to 51 kroner per share, the price of their previous selldown in December 2010, said the people. The stock is trading at about 14 percent below that level now.
Others have already taken advantage of an opening in the markets. Last month, Abertis Infraestructuras SA (ABE), Spain’s biggest toll-road operator, sold part of its stake in Paris- based satellite company Eutelsat Communications SA (ETL) for about $1.2 billion.
Buyout funds, which are currently seeking $175 billion from investors worldwide, managed to raise $21.4 billion last quarter, a rebound of 34 percent from the previous quarter and up 46 percent from the fourth quarter of 2010, according to data from Preqin.
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