OSLO, Norway-NetCom ASA’s board of directors rejected a takeover attempt by Tele Danmark in a $1.6 billion bid.
The Danish telecommunications company purchased 25,000 shares of NetCom for $33.38 per share. Because Tele Danmark, together with U.S. partner SBC Communications Inc., owns more than 40 percent of NetCom following the additional share purchase, Norwegian law required a Tele Danmark bid.
SBC owns 41.6 percent of the shares in Tele Danmark and 19.56 percent of NetCom’s shares.
NetCom said the Tele Danmark offer does not reflect the value of NetCom on a stand-alone basis or as a strategic partner and recommended its shareholders not accept the announced offer.
“The board does not accept Tele Danmark’s attempt to obtain gradual control as it strongly questions whether it reflects the true value,” said Leif Frode Onarheim, chairman of NetCom’s board of directors. “We are open to discussions with Tele Danmark, but will together with our advisers pursue other financial and strategic alternatives in order to maximize the value for all shareholders.”
Tele Danmark released a statement saying the correct offer price for NetCom shares is nearly $34 per share, rather than the $33.38 it paid for the original additional shares.
The market value of Tele Danmark is about $14.9 billion.
