Tele2, the Swedish telecoms group, plans to sell two divisions to Versatel of the Netherlands, a move that could help its attempt to gain full ownership of the Dutch operator.

The decision to divest the Belgian and Dutch operations of Tele2 is the latest twist in a long and contentious effort by the Swedish group to complete a takeover of Versatel, in the face of strong opposition from minority shareholders in the target company.

Tele2 controls Versatel, with 82.3 per cent of the operator once outstanding convertible shares are included.

But it has failed to reach the 95 per cent shareholder acceptance threshold required by Dutch law for its €1.34bn ($1.72bn) bid to be declared unconditional.

Rebel minority investors believe the €2.20-a-share offer by Tele2 undervalues the Amsterdam-based company. One analyst said yesterday’s move was aimed at squeezing out minority shareholders in Versatel, but warned the success of the venture was far from certain. Versatel is expected to issue new equity to raise funds to finance the purchase of Tele2’s Belgian and Dutch operations, diluting the holdings of existing shareholders.

Andreas Ekström, telecoms analyst at Handelsbanken Capital Markets, said: “The hope is that when they issue the new shares the minorities will not participate and that, hopefully, this will take [Tele2] over 95 per cent.” But he added that there was no assurance the latest plan would succeed. “It’s a gamble.”

As far back as last year Tele2 admitted continuing opposition from the minority investors in Versatel meant it was considering alternative ways to conclude the takeover.

These included Versatel acquiring the Belgian and Dutch units – Tele2 Finance and Tele2 Holdings Netherlands, respectively.

Versatel yesterday offered no details of the likely new share issue, although it said it expected the transaction to be finished by the end of the year. Questions remain over the pricing of the expected equity issue and the valuation of Tele2’s Belgian and Dutch operations.

A prospectus issued when Tele2 originally offered to take over Versatel last year stated the Belgian and Dutch divisions were worth €303m, although no guidance on the calculations behind this number was provided.

If the issue price of the new shares led to a significantly higher valuation, it would raise concerns that the operator was unfairly squeezing out the minorities by making the new issue unattractive.

Minority shareholders have already taken legal action over the original terms of Tele2’s attempted purchase of Versatel.

Neither Tele2 nor Versatel were available for comment on Wednesday.

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