Danish unions win the fight to keep private equity owned TDC open
TDC accepts the judgment of the Eastern High CourtJune 20, 2007
TDC has decided not to appeal the judgment of the Eastern High Court regarding the provisions to the Articles of Association of compulsory redemption of the minority shareholdings in TDC. NTC has also decided not to appeal the verdict (see attached press release).
"We have now had some time to examine the judgment and have decided not to appeal the decision. The Eastern High Court has by lack of sufficiently certain statutory regulation regarding the provisions of the Articles of Association in respect of compulsory redemption weighted in favour of the minority shareholders. We accept the decision of the Eastern High Court and therefore see no point in bringing the case to the Supreme Court", says Gitte Forsberg, Senior Vice President and General Counsel of TDC.
At an extraordinary General Meeting in TDC on February 28, 2006 a majority of the shareholders voted in favour of amending the Articles of Association with a view to delisting TDC from the Copenhagen Stock Exchange. Subsequently ATP brought action against TDC and NTC regarding the validity of the amendments to the Articles of Association. At the same time TDC brought action against the Danish Commerce and Companies Agency ("DCCA"), as DCCA refused to register the provisions of the Articles of Association.
On June 13, 2007 the Eastern High Court found for ATP's and the DCCA's claims that the provisions in the Articles of Association are invalid and therefore cannot be registered with the DCCA.
"We want to put an end to the case so we can focus on providing the best products and services to our customers instead of spending too many resources on legal issues", says Jens Alder, President and CEO of TDC.
But the asset sales continue as the private equity owners try to maximise their gains. TDC has together with the remaining shareholders in One decided to divest their share in he Austrian telecommunication business One to a consortium of Mid Europa Partners and France Télécom at a price of EUR 1.4bn. TDC's share amounts to EUR 213m and the sale of the 15 per cent shareholding is expected to result in a profit after tax of DKK 1.2bn to TDC.
One is Austria's third largest mobile operator and TDC has had its ownership share in One since May 1997. The remaining shareholders are E.on, Telenor, and Orange. One's head office is located in Vienna and the company has 900 employees.
Only two weeks ago, TDC sold another subsidiary company, Talkline TDC's mobile business in Germany, to debitel AG at a price of EUR 560m corresponding to DKK 4.2bn. The sale is expected to result in an after tax gain of approximately DKK 3.3bn.