Telia CFO reassures investors on share buybacks despite M&A plans

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By Olof Swahnberg and Helena Soderpalm

STOCKHOLM, May 30 (Reuters) - Nordic and Baltic telecoms operator Telia Company (LSE: 0H6X.L - news) will return cash to shareholders as planned despite talks to buy Sweden's Bonnier Broadcasting, its finance chief said.

Telia's exit from its previous growth engine in central Asia, which it began in 2015, has contributed to a strong balance sheet, raising expectations for generous shareholder payouts.

The company confirmed on Friday it was in talks to buy Bonnier's broadcasting business, seeking to add TV content in a deal which a media report said could be worth 10-12 billion crowns ($1.2-$1.4 billion).

But Telia shares fell as much as 4 percent as investors worried about threats to the planned return of cash and possible risks of buying content.

"I feel very comfortable about our balance sheet and we very much nurse for dividend and buy-backs, which are not to be affected if this kind of transaction would happen," Telia Chief Financial Officer Christian Luiga told Reuters in an interview late on Tuesday.

The Stockholm-based company said in April it would buy back 15 billion Swedish crowns of shares over the coming three years and raised its outlook for cash flow this year, saying it was now expected to be stronger than in 2017.

Luiga said Telia, which wants to make acquisitions in its Nordic and Baltic core markets, is considering several deals and has enough cash to act fast.

"We will go ahead with our quite strong acquisition agenda. A big part of it will be Norway if we want something substantial," he said.

Telia had said previously that broadband and cable-TV assets in Norway, where it mainly sells mobile services, were a top priority for acquisitions.

Luiga said changes in the way television is consumed, including more on-demand and more streaming, makes Telia want to have more control of content to service its over one million TV customers.

He added that Telia is also looking for companies in areas like internet security, cloud and data storage, not least in Sweden but also in the rest of the Nordics and the Baltics.

In a global wave reshaping the telecoms and media sectors, including AT&T (Sao Paolo: ATTB34.SA - news) and Time Warner (Frankfurt: A0RGAY - news) 's attempt to merge, recent deals in the Nordics include Tele2 (LSE: 0QE6.L - news) 's bid for cable-TV firm Com Hem (LSE: 0QV0.L - news) .

Telia began its retreat from central Asia after former management became embroiled in a bribery scandal in Uzbekistan. The company turned the page last year with U.S. and European settlements costing $966 million.

As part of the withdrawal, Telia said in March it had sold its stake in Azerbaijan mobile operator Azercell, which it co-owned with Turkish mobile operator Turkcell.

Telia has also sold stakes in Turkcell and Russia's Megafon over the past year, leaving its balance sheet far stronger than set out in its long-term financial targets.

In January, Telia proposed raising its dividend to 2.30 crowns per share for 2017 from 2 crowns in 2016, topping analysts' expectations. ($1 = 8.8485 Swedish crowns) (Reporting by Helena Soderpalm and Olof Swahnberg; Editing by Adrian Croft)