Private equity duo win TDF

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Texas Pacific Group and France’s Axa Private Equity have bought a majority stake in TDF in a deal that values continental Europe’s biggest owner of broadcast and telecoms masts and transmitters at €5bn ($6.3bn), including debt.

The deal will lift the value of private equity deals announced globally in the last 10 days to nearly $50bn, according to Thomson Financial. The research group said TDF was the fourth largest European buy-out deal, lagging VNU, the Dutch media group, AWG, the UK utility, and Philips’ semi-conductor business.

TPG and Axa Private Equity are understood to have won the auction for control of TDF after making a pre-emptive bid.

TDF’s owner, London-based buy-out group Charterhouse and Caisse des Dépôts, France’s state-owned financial group, will roll over some of their sale proceeds and invest alongside the new shareholders in a newly capitalised TDF.

The duo, who together own more than 80 per cent, are likely to have made hundreds of millions of euros in profits on their original deal when they acquired Télédiffusion de France in 2002 from France Telecom.

At that time, TDF had an enterprise value of €2.5bn, with Charterhouse investing €242m of equity. The duo’s combined shareholding will fall to about 38 per cent.

The sale will conclude after consultations with TDF staff, the works council and regulators.

TPG is understood to have out-gunned at least four competing bids. It faced competition from a team of Goldman Sachs’ private equity arm working with French private equity group PAI, while other bidders included a consortium led by Eurazeo, the French private equity group, Australian bank Macquarie, and Albertis, the Spanish infrastructure investor.

TDF has operations in France, Monaco, Spain, Finland, Poland and Estonia.

It is also present in Martinique, Guadeloupe, Guyana and Réunion and three French territories of Polynesia, New Caledonia, Wallis and Futuna.

It generated 2005 turnover of €954m, an underlying rise of 4 per cent. Television accounted for 38 per cent of sales, telecoms and services were 23 per cent, radio was 17 per cent, with about 14 per cent from overseas operations.

TDF provides over-the-air and wireless services to broadcasters and telecoms operators in Europe.

It enjoys a monopoly in broadcasting public TV and radio and has a strong position with commercial TV and radio companies.

It also has strong relationships with France’s three mobile operators, Orange, SFR and Bouygues.

TDF was regarded as an attractive asset because of its strong market positions and secure long-term revenues.

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