Swisscom linked with bid for Danish operator

THE eircom takeover plot thickened yesterday when potential buyer Swisscom was linked with a joint bid for a Danish company and the Swiss government announced plans to cut its stakeholding in Swisscom from 66% to 50%.

The Swiss finance minister said the government would sell part of its Swisscom stake to raise around €2.7 billion, its first move on its holding since floating the company in 1998. But it will retain a controlling interest for at least another two years, as current legislation prohibits the government from reducing its stake below the 50% threshold.

Hans-Rudolf Merz said the move would give Swisscom greater flexibility to enter into alliances with external partners.

“The government wants to free itself from ties, but also free Swisscom,” he said.

The announcement came as speculation grew that Swisscom had joined forces with a private equity group to get its hands on TDC, the number one fixed-line operator in Denmark.

A Swiss newspaper reported at the weekend that Swisscom had gained access to TDC’s books and was close to starting detailed talks about a possible €10bn takeover. But the company has been considered an outside bet to win control of TDC with two heavy-hitting private equity groups also in the race.

It has also been speculated that Swisscom will attempt a €20bn takeover of Dutch giant KPN if its TItThe company has already been involved in aborted takeover battles involving fixed-line operators in Austria and the Czech Republic.

Eircom shares regained lost ground yesterday, up 4c to €2.24. Its share price has slid after reaching a peak of €2.45 when news of the Swisscom approach was made public over two weeks ago. Swisscom’s outline approach is understood to value the company at €2.41 per share, or more than €2.6bn.

* Additional reporting Bloomberg.