UPDATE 1-TDC says to merge with biggest owner NTC

* TDC to merger with majority owner on Jan. 1

* Says aim is to improve TDC's capital structure

* Deal "clear sign" of plans to float TDC -2nd biggest owner

(Adds detail, background, ATP comment)

COPENHAGEN, Nov 26 (Reuters) - Danish telecoms operator TDC (TDC.CO) has agreed to merge with its majority owner Nordic Telephone Company in what another of its owners said indicated NTC was planning a flotation of TDC.

TDC, which has been widely tipped as a candidate for a big stock offering, said last week NTC, a partnership of private equity firms, had begun reviewing "strategic alternatives" for the company. [ID:nGEE5AM2DZ]

"The purpose of the merger is to simplify the group structure and to optimise TDC's capital structure," TDC said in a statement on Thursday, adding the merger was likely to be adopted by TDC's board before year-end.

"This is a clear sign they are preparing for an IPO. They wouldn't need to optimise the capital structure for an industrial sale," said Bjaarne Graven, head of funds at Danish pension fund ATP, which owns about 5.5 percent of TDC.

"As it appears, net income will be lower after the merger. This is attributable primarily to additional depreciation, mainly due to amortization of customer relationships," TDC said.

Full-year 2009 sales and net income from continuing operations excluding special items would be in line with the 2008 level, it said.

NTC, which owns 88 percent of TDC, is a subsidiary of the holding company held by Apax Partners, the Blackstone Group (BX.N), Kohlberg Kravis Roberts (KKR) [KKR.UL], Permira Advisers [PERM.UL] and Providence Equity.

Any flotation of TDC would be only the second in years on the Copenhagen stock exchange after Danish low-cost airline Cimber Sterling said on Wednesday it would go through with plans to go public next week after a successful bookbuilding process. [ID:nGEE5AP07Z]

Shares in TDC were up 1.23 percent at 247 crowns at 1513 GMT, while the Copenhagen blue-chip index .OMXC20 was down 1.1 percent. (Reporting by Anna Ringstrom and Peter Levring, Editing by Jon Loades-Carter) ((Copenhagen newsroom, tel: +45 33969649, e-mail: copenhagen.newsroom@thomsonreuters.com))