The private-equity owners of TDC – Denmark’s largest telecoms firm – are poised to sell almost US$3 billion in shares in the firm in what could be Europe’s largest share issue of the year. According to a Financial Times report, TDC plans to sell shares worth DKR16 billion (US$2.9 billion), valuing the company at about EUR9 billion, including debt. Such a sale would generate the first returns for the consortium of US and UK private-equity groups (Blackstone, Permira, Kohlberg Kravis Roberts, Apax Partners and Providence Equity Partners) that bought an 88 percent stake in the company for EUR13 billion in 2005. At the time, the deal was Europe’s largest ever leveraged buyout. While the deal was controversial, Kurt Björklund (pictured), co-managing partner of Permira and spokesman for the private-equity consortium, defended its record, claiming it had increased TDC’s operating profit margins, investment in its network, cash generation and customer satisfaction.

The move to sell equity follows TDC’s recent sale of its Swiss mobile network, Sunrise, which it sold to CVC Capital Partners for CHF3.3 billion (US$3.3 billion) in September. It had previously tried to merge the business with Orange Switzerland but had the deal blocked on anti-trust grounds. The Sunrise sale was part of a plan to focus TDC’s efforts on its core Nordic businesses, and Björklund said that the move to raise fresh capital from a share issue could be used to fund further acquisitions in the region’s telecoms markets. “Telecoms has always been and will remain a very attractive asset class for private equity as it has strong cash flow, some growth and there has been significant restructuring as markets become more open and competitive,” he said. TDC is the incumbent operator in Denmark and owns the country’s largest mobile operator, TDC Mobil.