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Finland cuts stake in TeliaSonera to 11.7%; bond sale could reduce holding to 9.5%

22 Mar 2012

The government of Finland, via state fund Solidium, has cut its holding in Scandinavian telecoms giant TeliaSonera from 13.7% to 11.7%. Solidium said the sale was to diversify its investment portfolio and improve financial flexibility, reports Dow Jones Newswire. The fund sold 89 million shares for a total of SEK4.02 billion (USD598 million), while it has also placed SEK5.3 billion of bonds exchangeable into TeliaSonera shares at SEK57.63 a share; should all the three-and-a-half-year bonds be exchanged, Solidium’s stake in TeliaSonera would fall to 9.5%.

The Swedish government is the largest shareholder in Stockholm-based TeliaSonera with a holding of 37.3%, but following the Finnish share sale, the combined shares of the two governments has been reduced to 49.1% from 51.1%. Swedbank analyst Sven Skold was quoted as saying that private equity firms are sure to be interested in a bid for TeliaSonera in the future, although state ownership hinders potential acquisition deals, and the Swedish state would have to reduce its stake to remove political obstacles to a buyout. While neither government has representatives on TeliaSonera’s board, state involvement has influenced the company in recent years, for example at the company’s 2010 annual general meeting, where the Swedish government pushed through a ban on bonuses for senior managers that year. TeleGeography’s GlobalComms Database says that one obstacle to a takeover of TeliaSonera was removed in mid-2008 when Sweden’s armed forces gave the all-clear to the future full privatisation of the telco, with the condition that necessary measures would be taken to ensure Swedish national network security. The Swedish state has reduced its shareholding in phases over the years, and the telecoms group is amongst several enterprises earmarked by the current minority coalition government for further divestments, but in March 2011 a parliamentary vote went in favour of an opposition move to block the sale of a portion of the state’s holding in TeliaSonera.

Sweden, Telia Company

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