UPDATE 1-Morgan Stanley left holding TDC stock after offering

Wed Feb 15, 2012 12:00pm EST

* Morgan Stanley has 7.17 pct TDC stake after offering

* Bank is left with nearly half of stock offered

* TDC shares end down 0.9 pct on positive market

* Nordea says TDC share price hit by overhang (Adds details, quotes, share price)

By John Acher

COPENHAGEN, Feb 15 (Reuters) - Morgan Stanley was left holding a 7 percent stake in Denmark's TDC, or nearly half the total amount that it had tried to sell to institutions earlier this week in a deal which raised $1 billion for the telecom operator's main shareholders.

Morgan Stanley offered investors a 15.6 percent stake in TDC on Monday on behalf of TDC's main owners, and said on Tuesday that all 128.7 million shares were sold in the fully underwritten offering.

The goal of such an offering would normally be to place all the stock with investors on the day of the sale.

But on Wednesday TDC said that Morgan Stanley acquired about 59 million shares and now holds 7.17 percent of the total share capital and voting rights.

The TDC stock was sold at 43.40 crowns per share, which was a 4 percent discount.

TDC shares closed down 0.9 percent at 42.90 crowns on Wednesday, against a 2.5 percent rise in the bluechip index of 20 most traded and most valuable Danish stocks.

Nordea said in a market commentary that TDC shares fell because the news that Morgan Stanley was left with almost half the TDC stock meant that the "placement had not gone as expected."

"That means that a good 7 percent of the shares have now shifted to even 'weaker and more short-sighted hands' which are expected to sell out of TDC shares," Nordea said in the note to clients. "The overhang of shares is therefore bigger now than yesterday."

Nordea said that it still regarded TDC as an attractive, defensive stock with a solid dividend for investors with small risk appetite, but it recommend waiting to buy it until the share price has stabilised.

A Morgan Stanley spokesman in London declined to comment.

Morgan Stanley ran the offering for the sellers NTC, a consortium of private equity investment firms Apax Partners, the Blackstone Group LP, Kohlberg Kravis Roberts, Permira Advisers and Providence Equity Partners, which reduced their stake in TDC to 43.3 percent from 59 percent. (Editing by David Cowell)

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