TietoEnator: We're Still Talking

HELSINKI, May 20 (Reuters) – TietoEnator (TIE1V.HE: Quote, Profile, Research) repeated on Tuesday it was talking to parties other than Nordic Capital about its future, while analysts saw the Swedish investor effectively pulling away from its takeover bid for TietoEnator.

Nordic Capital has an ongoing hostile bid to buy all the top Nordic IT services firm's shares for 15 euros each, or 1.08 billion euros ($1.68 billion) in total. The deadline — postponed three times already — is Friday.

TietoEnator (TIEN.ST: Quote, Profile, Research) confirmed Nordic Capital's Cidron Services unit had sold its 4.4 percent holding in TietoEnator.

Nordic Capital was not immediately available for comment on whether it still wants TietoEnator. Nordic had made its offer conditional on acquiring 90 percent of TietoEnator's shares.

“The board continues to consider, and is in active dialogue on, other alternatives to enhance shareholder value,” TietoEnator said.

Analysts said on Monday after Nordic Capital's statement about the stake sale, that getting rid of the holding may mean it was not prepared to raise the offer, which TietoEnator's board and shareholders representing more than 10 percent of the company's shares have snubbed as too low.

“This was a statement effectively meaning that they won't be hiking their offer,” Pohjola Bank analyst Hannu Rauhala said after Nordic Capital's statement.

TietoEnator — whose customers include Nokia (NOK1V.HE: Quote, Profile, Research) and Ericsson (ERICb.ST: Quote, Profile, Research) — has long been seen as a takeover target. People close to the matter told Reuters last week Blackstone (BX.N: Quote, Profile, Research), Telenor (TEL.OL: Quote, Profile, Research) and EDB Business Partner (EDBASA.OL: Quote, Profile, Research) were in talks with TietoEnator about a white-knight bid. 

The three-way consortium is considering a plan to buy TietoEnator and merge it with EDB, though the structure of the bid has yet to be decided, the sources said.

Europe's largest IT services firm Capgemini (CAPP.PA: Quote, Profile, Research) told Reuters on Tuesday that its smaller Nordic rival would be too big for the company to buy. [nL20584997]

TietoEnator shares eased 0.2 percent to 14.73 euros by 0935 GMT, against a 0.9 percent weaker DJ Stoxx European technology index . (Reporting by Sakari Suoninen, Sami Torma, Tarmo Virki and Anna Ringstrom; Editing by Louise Ireland)