TDC Gains as Sale Turns Focus to Valuation: Copenhagen Mover

TDC A/S rose the most in nine days in Copenhagen trading after its private-equity owners cut their stake and investors shifted attention to the stock’s valuation after it trailed the market.

TDC, Denmark’s biggest phone company, rose as much as 1.2 percent, the most since Nov. 19. The stock advanced 0.7 percent to 37.58 kroner at 10:18 a.m. in the Danish capital with trading volume at 55 percent of the three-month daily average. The share outperformed the Copenhagen 20 Index which fell 0.3 percent.

TDC shares lost 4.2 percent yesterday when its private-equity owners raised about 2.97 billion kroner ($517 million) by selling 10 percent of the stock in their latest move to reduce their stake in the Copenhagen-based phone operator. Credit Suisse Group AG today raised its recommendation on the share to outperform from neutral saying “investor focus will shift back to the operational trends,” which include TDC’s ability to raise prices. Sydbank A/S analyst Morten Imsgard said the share is set to gain as the funds move closer to a complete exit.

“The private-equity funds’ sale of shares is a clouding element for the TDC case as it has kept the spotlight away from the company’s healthy fundamental values,” Imsgard, who’s based in Aabenraa, Denmark, said by phone. “Investors are afraid they might get wrong-footed amid a sale of a big chunk of shares, but for the long term, it’s positive every time the sale of a chunk has been completed and is over with.”

Imsgard, who has an overweight recommendation on TDC, said the owners will probably complete three more lump sales in 2013 before they exit the investment completely. After yesterday’s sale, the funds still hold about 33 percent of TDC, the phone company said in a statement.

TDC’s shares have lost 18 percent this year compared with a 12 percent decline in the Stoxx 600 Telecommunications Index.

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