Morgan Stanley was left holding a 7 percent stake in Denmark's TDC
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 <.OMXC20> 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 stabilized.
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
(Editing by David Cowell)