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Halted Swiss merger could delay TDC IPO

26 Apr 2010

Plans to hold an initial public offering (IPO) for Denmark’s incumbent telecoms operator, TDC, could be put on hold following the Swiss regulator’s decision to block the planned merger of France Telecom (FT) and TDC’s units in Switzerland, people familiar with the situation told Dow Jones Newswires. According to sources, banks hired to carry out a strategic review of the IPO – including JP Morgan, Deutsche Bank, Credit Suisse, UBS and Goldman Sachs – have cancelled meetings scheduled to take place this week to prepare the prospectus for the offering. As reported by CommsUpdate, Switzerland’s Competition Commission (ComCo) last week rejected the merger of FT’s Orange and TDC’s Sunrise units on the grounds that the merger would create a ‘dominant position’ in the market. The new company would have been Switzerland’s second-largest mobile operator behind Swisscom. France Telecom was expected to take 75% of the enlarged entity. Banking sources said that ComCo’s decision will delay the IPO, which was being prepared on financial assumptions that no longer apply. ‘They were preparing an IPO on the basis of a certain timetable and a certain mix of assets so this will have to be re-evaluated,’ said one banker on the deal.

TDC was acquired by Nordic Telephone Company (NTC) – a private equity consortium including Apax Partners, Blackstone, Kohlberg Kravis Roberts, Permira and Providence Equity Partners – in December 2005 in a EUR13 billion (USD17.8 billion) leveraged buy-out deal. Although the firms have not yet fully decided on a complete exit from TDC, full stock market floatation is considered the most likely option and was slated to take place as early as the second quarter of 2010.


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