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TDC rows back on MTG deal

Danish telecommunications firm TDC Group’s board of directors intend to withdraw their agreement to take over the Nordic TV business belonging to Sweden’s Modern Times Group (MTG).

The deal, valued at SEK19.6bn (US$2.5bn), was unveiled earlier this month and was to include the sale of the MTG Entertainment and MTG Studios units – together known as MTG Nordics – in whole to TDC, the largest telecoms company in Denmark.

However, agreement is now up in the air after TDC Group became the subject of its own takeover bid, with three pension funds and Australian investment bank Macquarie making an unsolicited offer for the telco.

The Danish company’s bid for MTG had been panned by investors after it was revealed at the beginning of February, with TDC shares falling around 8% prior to the firm itself becoming a takeover target.

TDC said it now intends to withdraw its recommendation to combine operations with MTG, with the latter saying it would provide further information to the market as and when it is received.

MTG Nordics includes broadcasting, streaming and distribution operations in Sweden, Denmark, Norway and Finland, spanning free and pay TV. It houses the Viasat satellite TV platform, Viaplay digital streaming services, Nice Entertainment production operation and distributor DRG.

Nice is one of Europe’s biggest producers, with a portfolio that includes Monster, One Big Happy Family, Playroom, Rakett and Novemberfilm in Norway, as well as Strix in Scandinavia and the Netherlands, Paprika Latino in Eastern Europe and Redaktörerna in Sweden.

It includes 28 companies in 16 countries and was acquired by MTG in a deal worth €84.4m (US$114.2m) five years ago.

The deal would have seen TDC pay SEK3.3bn in cash and issue 309 million new shares to existing MTG stakeholders, implying a value of SEK19.6bn for the combined business.

The combination was set to create a player with preliminary combined net sales of approximately DKK30.6bn (US$5.11bn) and EBITDA of DKK9.6bn for 2017.

The remaining MTG business were set to focus on the expansion of its global digital entertainment operations, spanning areas such as eSports.

TDC CEO Pernille Erenbjerg would have become CEO of the combined company, with MTG executive VP Anders Jensen becoming deputy CEO.


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