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August 17, 2005

TDC at center of VC takeover speculation

For months now, venture capitalists have been trying with little success to break into the European telecoms and mobile landscape, and the latest company to enter their sights is the Danish incumbent carrier TDC AS.

By CBR Staff Writer

According to a report in the Wall Street Journal, two sets of UK- and US-based VCs have approached the carrier’s management about a potential deal to buy the whole company, which is valued at 7.28bn euros ($8.95bn). A formal bid has yet to be made however.

The first consortium thought to be lining up for the Danish carrier includes London-based Apax Partners and Permira Advisors, along with Blackstone Group of New York, and Providence Equity Partners of Rhode Island. The second consortium is thought to include Kohlberg Kravis Roberts & Co of New York, and London-based BC Partners.

TDC is attractive because its various operations can be easily sold to telecom competitors in different parts of Europe. It also dropped a poison pill clause in February this year.

Venture capitalists have not had a lot of success recently trying to acquire European telecoms and mobile operators. A couple of VC-backed consortiums lost out when Irish telecom operator Eircom Group Plc beat them in the race to acquire Ireland’s third largest mobile operator Meteor Mobile Communications Ltd for 420m euros ($511m).

A couple of venture capitalist consortia also lost out when France Telecom SA mounted a successful last minute bid to acquire Spain’s third largest mobile operator Amena Movil for 10.6bn euros ($12.9bn) including debt.

Prior to that, VC funds were beaten in a bidding war earlier this year to acquire Wind, Italy’s third mobile operator, which was won by the Egyptian billionaire Naguib Sawris who purchased a controlling stake that valued Wind at 12.1bn euros ($14.8bn). Other failed bids include offers for mobile and fixed-line operations in Austria and the Czech Republic.

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