Telefonica increases E-Plus bid; KPN and AM support offer

Spanish giant Telefonica has increased its offer for German cellco E-Plus. The owner of E-Plus, KPN, will receive EUR5 billion (USD6.7 billion) in cash as before, but now stands to take a 20.5% stake in the new company created by the merger of Telefonica Germany and E-Plus, rather than 17.6% as previously agreed. Additionally, KPN will provide a call option to Telefonica to acquire a 2.9% stake in the newly enlarged Germany operator, which can only be exercised one year after the deal is completed. The changes mean that the overall value of the deal is now EUR8.55 billion, up from EUR8.1 billion. KPN and America Movil, the Dutch company’s largest shareholder, have agreed to support the sale. Shareholders are due to vote on the proposal on 2 October.