Danish national carrier TDC A/S (Copenhagen: TDC) is to recommend to its shareholders a takeover offer of 382 Danish Kroner in cash per share that values the operator at just over $12 billion. (See TDC Announces Offer.)

The value of the offer, made by the newly-formed Nordic Telephone Company ApS, is in line with expectations, and sent TDC's share price up DKK16.5, nearly 5 percent, to DKK378.5. (See TDC Close to $12B Sale?.)

The Nordic Telephone Company is owned by a group of five investment firms -- Apax Partners, The Blackstone Group, Kohlberg Kravis Roberts, Permira, and Providence Equity Partners.

TDC says its board negotiated better terms than were originally offered, and is now prepared to recommend the offer to shareholders. However, TDC also states that the current agreement means it can enter into "discussions or negotiations with third parties that may lead to an alternative proposal to acquire TDC or otherwise lead to the offer not being completed in the best interest of TDC and its stakeholders."

That leaves the door open for a rival private equity consortium, including Apollo Management and Silver Lake Partners, that has reportedly been considering a bid for the Danish operator.

TDC also says it's free to continue running its business as it sees fit, and that could include further M&A activity, an area where TDC has been busy in the past year. (See TDC to Sell Contactel, TDC to Sell Directories Biz, TDC Buys Song, Reports Q3, TDC Buys Swiss Integrator, and TDC Buys Dotcom in Sweden.)

The terms of Nordic Telephone's offer is good news for TDC's bondholders, as the private equity group has offered to buy most of the outstanding bonds at full face value. Analysts had reported that TDC bonds had been trading at a discount (as low as 87 percent of face value) because the takeover bid was expected to be funded by fresh debt that would have ranked higher than the existing bonds.

The Financial Times this morning reported that five banks are due to provide up to $10 billion in bonds and high yield loans to fund Nordic Telephone's proposed acquisition.

— Ray Le Maistre, International News Editor, Light Reading