States End Majority Ownership Of TeliaSonera
03/21/2012| 06:32am US/Eastern
--Finland's state fund Solidium cuts stake in TeliaSonera to 11.7% from 13.7%
--Sweden, Finland governments no longer have absolute majority ownership in TeliaSonera
--Solidium said it sold 89 million shares at SEK45.20 a share
(Rewrites, adds detail, analyst comments in 6th to 9th paragraphs)
By Sven Grundberg
The governments of Finland and Sweden have ended their absolute majority in telecommunications company TeliaSonera AB (>> TeliaSonera AB) after Finland's state fund Solidium cut its stake to 11.7% from 13.7%.
Solidium said it sold a total of 89 million shares at SEK45.20 a share.
After the sale, the two governments own 49.1% of shares in TeliaSonera, down from 51.1% previously.
Swedbank analyst Sven Skold said while state ownership may be positive for TeliaSonera's credit rating in turbulent times, it hinders potential merger or acquisition deals.
"Providing one, or several, private equity firms were able to raise enough capital, they would surely be very interested in acquiring TeliaSonera. There is much a private equity firm can do to improve former telecom monopolies," he said.
However, Skold added that the Swedish state would have to reduce its ownership further before political obstacles to a buyout were removed.
TeliaSonera was formed after a merger between the Swedish and Finnish state-owned telecommunications companies Telia and Sonera in 2002. While neither state has representatives on TeliaSonera's board, the governments' involvement has influenced the company in recent years.
At the company's 2010 annual general meeting, for example, the Swedish government, which holds 37.4% of the company, found itself with a majority of votes, and managed to introduce a ban against bonuses for top managers that year.
Solidium said the reason for the sale was to diversify its investment portfolio and improve its financial flexibility.
"We will use the proceeds to finance our recent and upcoming equity investments, mainly into Outokumpu Oyj (OUT1V.HE), Outotec Oyj (OTE1V.HE) and Talvivaara Mining Co. Plc. (TLV1V.HE)," Managing Director Kari Jarvinen said.
Solidium has also placed EUR600 million of bonds with a maturity of three and a half years and exchangeable into TeliaSonera shares at a price of SEK57.63 a share.
Should all bonds be exchanged, Solidium's stakeholding in TeliaSonera would fall to 9.5%, the fund said.
Solidium raised EUR1.05 billion from the share sale and bond offering.
At 0823 GMT shares in TeliaSonera were trading 3.5% lower at SEK45.80.
-By Sven Grundberg, Dow Jones Newswires; +46-8-5451-3098; email@example.com