TDC A/S, a Danish phone company
owned by five private equity firms, may be worth as much as 65
billion kroner ($12 billion) based on the valuation of its
rivals, according to SEB AB, a manager of TDC’s stock offering.

TDC, the nation’s largest phone company, may get an
enterprise value of 65 billion kroner, or 10 percent higher than
peers, based on SEB’s projections for the companies’ 2011
earnings before interest, taxes, depreciation and amortization
minus capital spending. The premium would be justified because
TDC’s Ebitda growth through 2012 may be the highest among its
competitors such as Royal KPN NV, Swisscom AG and TeliaSonera
AB, SEB said in a note sent to potential investors.

The average of all valuation models used by SEB suggested
that TDC is worth 52 billion kroner, according to the note. In
stock offerings, companies normally sell for less than the top
price to guarantee an increase in post-sale trading.

TDC rose 0.1 percent to 53.95 kroner in Copenhagen, erasing
an earlier loss of as much as 3.3 percent, valuing the stock at
53.5 billion kroner as of 1:01 p.m. local time.

TDC announced on Nov. 12 that its owners will sell a
portion of their shares, without revealing details about the
size, price or timing for the stock sale. Copenhagen-based TDC
is controlled by NTC SA, a holding company for the shares of
Apax Partners LLP, Blackstone Group, KKR Co. LP, Permira
Advisers and Providence Equity Partners Inc.

The buyout firms, which completed an acquisition of 88
percent of TDC for $15.3 billion in 2006, including net debt,
will remain “significant” shareholders, TDC said on Nov. 12.

Investment Risks

TDC has improved its Ebitda margin to 41 percent from 28
percent in the past five years, Chief Executive Officer Henrik Poulsen said two weeks ago. Its Ebitda margin will probably
continue to grow to 41.7 percent in 2011 and 41.9 percent in
2012, according to the SEB analysts.

A failure to increase revenue in the landline, mobile
phone, Internet and TV businesses would post major risks for TDC
in the future, the note said.

JPMorgan Chase Co., Morgan Stanley and SEB AB are
managing the sale as global coordinators while Deutsche Bank AG
and UBS AG are also bookrunners.

TDC has remained listed on the Copenhagen Stock Exchange
because ATP, Denmark’s biggest pension fund, refused to sell its
5.5 percent stake in the company.

To contact the reporters on this story:
Zijing Wu in London at zwu17@bloomberg.net
Elisa Martinuzzi in Milan at
emartinuzzi@bloomberg.net

To contact the editors responsible for this story:
Daniel Hauck at dhauck1@bloomberg.net;
Edward Evans at eevans3@bloomberg.net.