America Movil paves the way for KPN exit with EUR3bn bond placement

21 May 2015

Mexican telecoms giant America Movil (AM) has completed the placement of EUR3.0 billion (USD3.3 billion) worth of senior, unsecured bonds, which are exchangeable into ordinary shares in KPN, effectively paving the way for AM to exit its ownership of the Dutch telco, two years after its failed takeover bid. The exchange price has been set at EUR4.9007, a premium of 45% above the reference price of EUR3.3798 (the volume weighted average price on the Euronext Amsterdam Stock Market on 20 May 2015). The exchangeable bond offering is expected to close on 28 May 2015.

Meanwhile, Reuters reports that AM originally planned to sell up to EUR2.5 billion of bonds but extended the offer within three hours of the launch due to the high demand. According to the news agency, KPN’s share value has increased by 29% in 2015, only to fall 4.5% following AM’s announcement.

According to TeleGeography’s GlobalComms Database, on 30 May 2012 AM launched a formal bid to acquire 28% of KPN Telecom (in which it already held a 4.8% stake) and, despite opposition from the KPN board, by the end of the year AM had increased its stake in the operator to 29.77%. In August 2013 AM outlined to make a tender offer in cash for all of KPN’s ordinary shares that it did not already own at a price of EUR2.4 per share. However, later that same month the KPN Preference Shares B Foundation, an independent legal entity with the statutory goal of protecting KPN’s interests, exercised a call option in respect of securities of KPN, after which it held preferred shares of KPN representing 50% of the voting shares less one share. With AM noting that this made its goal of acquiring more than 50% of the voting rights for KPN unachievable, in October 2013 the Mexican outfit confirmed it would not launch its planned tender offer and later reduced its stake in the Dutch company, selling off a 2.38% holding in November 2013 for MXN4.3 billion (USD282.8 million).

Netherlands, America Movil (AM), KPN