AM increases KPN stake; Dutch firm considers divestments to fend off hostile bid

12 Jun 2012

America Movil (AM) the telecoms group owned by Mexican billionaire Carlos Slim has increased pressure on KPN shareholders by buying up more stock of the Dutch telco and at a lower price than his current tender offer for up to 27.7% of the group, Reuters reports. In four separate transactions carried out yesterday, AM acquired a total of six million ordinary shares of KPN to increase its overall holding in KPN to 7.3%. A statement from the Mexican powerhouse confirmed that the transactions were completed at a price of EUR7.8 (USD9.8) per ordinary share. KPN shares closed at EUR7.769 on Monday. The latest acquisitions mark the second time in as many weeks that AM has snapped up KPN stock. On 31 May it boosted its total holding to 5.01% – albeit it did not divulge the price it paid at the time.

For its part, KPN is said to be still considering plans to sell off its Belgian operation BASE to fend off Slim’s hostile bid for the whole group, while other reports suggest it could also look to divest its only other significant European asset, E-Plus in Germany, as part of the same plan. A spin-off of E-Plus could lead the way for a merger with rival Telefonica Germany (O2), which is owned by Spanish telecoms group Telefonica. The company, which is struggling to cut its debt burden amid falling revenue and profit in its domestic market, is preparing for an initial public offering (IPO) of Telefonica Germany and exploring potential listings of Latin American assets.

At the end of last month AM launched a formal bid for a 27.7% stake in the Dutch telecoms group, following an announcement earlier in the month that it was considering a possible USD3.45 billion deal for the shares as part of a plan to secure a foothold in the European market. KPN swiftly dismissed the offer as too low and announced that it would ‘continue to explore all strategic options’, instead.

Belgium, Germany, Netherlands, America Movil (AM), BASE Company, E-Plus Group, KPN