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Telia bids $2.6B for NetCom
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June 23, 2000: 9:56 a.m. ET
Swedish firm trumps Danish offer for Norwegian cellular operator
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LONDON (CNNfn) - Sweden's Telia AB trumped rival Tele Danmark A/S Friday by snapping up a 51 percent stake in Norwegian cellphone operator's NetCom ASA and offering to buy the rest of the company in a deal that would value the total transaction at 22.85 billion Swedish crowns ($2.6 billion).
Tele Danmark has pursued NetCom for more than a month, and with partner SBC Communications Inc, already owns a 40 percent holding in the Norway-based cellular operator. SBC (SBC: Research, Estimates) owns 41 percent of Tele Danmark.
Telia acquired the 51 holding from a number of other companies, including SEC, Orkla and KLP Forsikring, and offered to pay 470 Norwegian crowns cash per share for the rest of the company. Telia said it would hold a press conference Monday to discuss the purchase.
Tele Danmark offered 310 crowns per share for NetCom in May, a bid that was triggered under Norwegian corporate law when its holding in NetCom rose to 40 percent. NetCom directors rejected Tele Danmark's offer, which valued the Norwegian company at $1.6 billion, as too low.
NetCom shares were suspended in Oslo Friday. They closed at 413 crowns Thursday, following media reports of a likely bid from Telia.
A deal would cement Telia's position as the region's largest mobile telecommunications company, despite the failure last year of its planned merger with Norwegian rival Telenor. Owning NetCom would give Telia 28 percent of the Nordic mobile market, 4 million subscribers, and a presence in every country in the region. NetCom is Norway's second-largest cellular operator, behind Telenor, and has 750,000 subscribers.
Scandinavia has the world's highest ownership rate for cellular phones.
In a statement Telia said it would fund the whole purchase cost of its NetCom shares from borrowings, raising its debt to 32.7 billion crowns after the deal from 7.6 billion crowns before it.
Telia was partially sold by the Swedish government earlier this month. 
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