TDC Falls as Private-Equity Owners Sell 15 Percent Stake

TDC A/S shares tumbled the most in 10 weeks in Copenhagen after private-equity owners sold a 15 percent stake in the Danish phone company earlier than a three-month lock-up period that was agreed upon last year.

The shares dropped 2.3 percent to 40 kroner at 2:23 p.m. local time after the placing of the stock worth about $850 million. NTC Holding sold 120 million TDC shares, according to a statement. UBS AG, the sole bookrunner, sold the stock at 39.50 kroner apiece after originally offering 80 million shares, according to a person close to the deal who asked not to be identified.

“The fact that they increased the size of the offering likely reflects good demand,” said Ole Petter Kjerkreit, an analyst at ABG Sundal Collier in Oslo who recommends buying the shares. “That is understandable as we think it is a good investment at these levels. We expect them to exit the company at some point but this is probably the selling round for now.”

The shares had climbed 9.7 percent through yesterday since NTC on Nov. 27 sold 80 million shares at 37.10 kroner apiece in a deal managed by JPMorgan Chase & Co. At the time, the sellers pledged not to dispose of any further shares for 90 days.

Stephen Malthouse, a spokesman for NTC in London declined to comment on today’s deal. Povl Damstedt Rasmussen, a spokesman for TDC in Denmark, said it is the company’s policy to not comment on shareholder transactions.

TDC’s private-equity owners have been paring their holdings in Denmark’s largest telephone company since December 2010 when they cut their stake to less than 60 percent from about 88 percent by selling shares to the public. In February 2012, they sold about 15 percent of the company, leaving then bookrunner Morgan Stanley with almost half the stock.

Apax Partners LLP, Blackstone Group LP, KKR & Co., Permira Advisers LLP and Providence Equity Partners Inc. created holding company NTC, which agreed to acquire TDC in 2005 for $15.3 billion, Europe’s largest leveraged buyout at the time.

NTC and its subsidiaries now own about 18 percent of TDC’s equity and voting rights -- excluding treasury shares -- following payment and settlement of the transaction which is expected to take place on Feb. 13, according to the company statement. The sellers pledged a new 90-day lock-up as part of today’s deal, according to terms obtained by Bloomberg.

TDC on Feb. 5 reported fourth-quarter net income of 617 million kroner ($111 million), below analysts’ estimate of 625 million kroner. The company’s sales projection for 2013 also missed forecasts.

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