UPDATE 2-TDC's main owners sell $1 bln of stock, cede control

* Private equity owners sell 15.6 pct stake in TDC

* 128.7 mln shares sold at 43.40 DKK/share - market source

* Deal is worth 5.59 bln DKK ($994 mln (Adds details, quote; updates share price)

By John Acher

COPENHAGEN, Feb 14 (Reuters) - Danish telecoms group TDC's main owners, a group of private equity funds, have sold $1 billion worth of stock and relinquished majority control in the process.

Morgan Stanley, which brokered the sale, said NTC - a consortium of five investment firms - had sold 128.7 million shares, reducing their holding in TDC to around 43.3 percent from 59 percent.

The deal was done at a price of 43.40 crowns per share, a market source said. At that price the sale would be worth about 5.59 billion Danish crowns ($994 million).

The price was at a 4 percent discount to Monday's closing market price of 45.20 crowns per share.

On Tuesday the share fell as low as 42.76 crowns but recovered to 43.22, still down 4.4 percent by 1131 GMT. It underperformed a 0.4 percent fall in the Copenhagen bluechip index of 20 most valuable and most traded stocks.

"It was a fairly big placement...so there is a little overhang now, but I think during the day we'll see some buyers coming in and see a closing near the placement price," Sydbank head of equities sales Ole Jensen said.

TDC, Denmark's former national telecom and still its biggest operator, has enjoyed relatively steady profits and revenues despite intense competition in the mobile market. It has focused on its domestic and Nordic markets after selling its Swiss business Sunrise in 2010.

Morgan Stanley said it sold the stock on behalf of certain investors in NTC. It did not identify them further.

The consortium comprises Apax Partners, the Blackstone Group LP, Kohlberg Kravis Roberts, Permira Advisers and Providence Equity Partners.

The offering was the second sale of TDC stock by NTC, which bought nearly 89 percent of TDC in the autumn of 2005 and sold 28.8 percent of the stock in one of the biggest share offerings of 2010 for around $2.2 billion.

While Europe's market for new listings remains inactive, several days of rallying markets this month have given bankers a chance to run accelerated deals for clients, either raising new money or allowing major shareholders to reduce their stakes.

Last week Sky Deutschland raised 155.8 million euros from a share sale, while on Tuesday French regulator AMF said Paolo Bulgari had sold 236.55 million euros of shares in luxury group LVMH.

TDC said late on Monday evening, when the offering was announced, that it would suspend a share buyback during the offering but restart it once it was completed.

Morgan Stanley was the sole bookrunner, with Carnegie and SEB Enskilda acting as selling agents. ($1=5.6242 Danish crowns) (Additional reporting by Kylie MacLellan in London; Editing by Greg Mahlich)