TDC Confirms Approach; Stock Surges on Report of Apollo Interest

  • Danish carrier: rejected preliminary bid from unnnamed suitor
  • Phone company’s shares jump the most since 2010 in Copenhagen

TDC A/S shares extended gains after the Danish phone carrier confirmed it received a takeover approach, responding to a report that Apollo Global Management LLC is interested in buying the carrier and taking it private.

Apollo, the U.S. private-equity firm, has hired investment banks Lazard Ltd. and FIH Partners to help with its plans, Danish business daily Boersen reported, citing sources it didn’t identify. TDC said in a statement it declined an approach from a potential buyer, calling the proposal inadequate. The company didn’t identify the suitor.

"TDC confirms that it received a highly preliminary approach for a potential acquisition of control of TDC," the carrier said. "TDC reviewed the approach and concluded that it was financially inadequate, incomplete and not in the best interest of shareholders. Consequently, TDC has decided not to pursue it any further."

TDC rose as much as 12 percent, the biggest jump since 2010, and was up 9.3 percent to 35.59 kroner at 10:57 a.m. local time, valuing the operator at 28.9 billion kroner ($4.3 billion). The stock is still trading near the lowest levels in more than a decade after the Danish carrier earlier this year canceled a dividend payment and forecast shrinking profits because of stiff competition with rivals Telia AB and Telenor ASA.

Chief Executive Officer Pernille Erenbjerg is seeking to maintain TDC’s investment grade rating while making the company’s Danish business more competitive. The carrier sold its Swedish unit to Sweden’s Tele2 AB in June for an enterprise value of 2.9 billion kronor ($339 million) to help reduce debt.

TDC expects earnings before interest, taxes, depreciation and amortization to be about 8.4 billion kroner for 2016, it said last month.

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