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Five banks are understood to be preparing $10bn in financing for the takeover of TDC, the Danish telecoms group which is close to being bought for $11.5bn by a
private equity consortium.
JP Morgan; CSFB; Deutsche Bank; Barclays Capital and Royal Bank of Scotland will provide a combination of senior debt and high-yield loans to fund the deal, say people close to the situation.
The consortium, made up of Apax Partners; Permira; Blackstone; Kohlberg Kravis Roberts and Providence, was last night finalising details of the deal, which could be announced as early as on Wednesday.
Telecoms companies are taking advantage of low interest rates to fund their deals. Figures from Dealogic, the data provider, show that in the year to September 1, total syndicated lending was $809bn in western Europe, 55 per cent higher than in the same period last year.
Earlier this year, Naguib Sawiris, the Egyptian businessman leading the €2.1bn ($2.5bn) takeover of Wind, the Italian telecoms business, launched a €9.3bn debt package; while Telefónica plans a $32.7bn syndicated loan to finance its £17.7bn ($30.4bn) all-cash bid for O2.
Although the Danish government is unlikely to interfere in the takeover of TDC, trade unions are sceptical about the levels of debt needed.
The Dansk Metal Union, which has about 11,000 TDC employees as members, said it was worried the equity funds would “mortgage TDC higher than its mobile phone masts”.
“If the equity funds are bent on stripping off TDC’s assets, burdening it with debt and sacking hordes of workers rather than running and developing the company, then they’ll get a fight to the finish,” it said.
With some 84,000 individual shareholders owning a combined 198.4m shares, TDC is an extremely widely-held company. About 82,000 of the shareholders are private investors and employees, who between them own 15 per cent of TDC.
Three institutional investors – Capital Group and Franklin of the US, plus Denmark’s ATP – hold stakes in the region of 5 per cent.
ATP rebuffed an approach to sell from the Apax consortium in October because it did not want to limit its flexibility by acquiring insider information. Any pledge by ATP to sell its stake to a bidder would render it liable to disclosure under Danish stock exchange regulations.