Apax, Blackstone, Permira and Providence fully exit TDC

Kimberly Romaine
28 March 2013

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The sale of TDC shows that not all investments made during the heady days leading up to the crisis were bad eggs.

It was the biggest deal of its time in Europe, with the consortium – KKR, Apax, Blackstone, Permira and Providence – agreeing to pay more than $15bn for an 87.9% stake of the target. Now, all but KKR have fully exited their stakes in listed Danish telecommunications company TDC. Investors in Permira have made 1.6x money (gross) from the deal – showing that not all the mega-buyouts of the boom years are doomed.

The final share sale saw 56,332,848 shares sold at DKK 44.27 each in an accelerated bookbuilt offering led by UBS Ltd. The sale represented a 6.8% stake. The share price was an increase on last month's sale of a 15% stake at under DKK 40 per share, and nearer the DKK 51 seen at the time of the December 2010 share offering. The price hit a nadir of DKK 37.9 last May.

The overall positive result will be a relief for investors since the road has not been a smooth one for the backers, with bumps from the outset. During the initial deal, minority shareholders of TDC – namely ATP – put up a fight into early 2006.

The holding period then saw some twists and turns: in June 2008 the private equity backers de-levered the business with a €200m debt buy-back, but paying 90-95 cents to the Euro was considered by lenders to be a breach of the original loan agreement (the backers contested this). By 2009 the consortium was planning a sale for the first half of 2010 but shelved it in May that year due to a Swiss regulatory decision to block a proposed merger of TDC's Swiss mobile phone business with a France Telecom subsidiary.

NTC eventually partially exited the business through a $2.2bn share offering in December 2010 – one of the year's largest offerings – which saw its initial 88% stake reduce to 60.2%. Then in February 2012, Morgan Stanley led another offering reducing the share to 43.3%, leaving then bookrunner Morgan Stanley with almost half the stock. Further share sales saw the consortium left with just under 26% at the end of last year. This February, 120 million shares (around 15% of the company) were sold worth $590m.

Permira was not available to comment.