América Móvil prepared to withdraw KPN offer over Dutch resistance

América Móvil said it remains committed to its intended offer of €7.2 billion ($9.52 billion) for KPN, but would be prepared to withdraw its bid if an independent foundation that sought to block the Mexican company's offer did not change its position.

Late on Thursday, the KPN foundation said it had exercised an option to buy certain shares that will give it almost 50 per cent of KPN's voting stock and enable it to almost entirely block the move by the Carlos Slim-owned company to gain majority control of the Dutch operator, Bloomberg reported.

According to Bloomberg, the foundation said it will only hold the shares temporarily in order to give América Móvil the opportunity to address its concerns over the offer. It appears that these concerns were not alleviated by América Móvil's recent announcement that it would support KPN's plan to sell its German E-Plus unit to Telefónica following an improvement in the Spanish group's offer to €8.55 billion.

"We want clarity and structure," Walter Samuels, a foundation spokesman, told Bloomberg. "We need an orderly process which will lead to a merger protocol, an offer document and just follow the procedures."

The foundation said it supports the plan to sell E-Plus to Telefónica.

In a statement, América Móvil said it remains committed to the intended offer for KPN, but is prepared to withdraw its offer "in the event that the foundation maintains its current position and seeks to prevent the offer from proceeding to the detriment of KPN's customers, employees and shareholders, and also to the detriment of telecommunication services in the Netherlands, all of whom América Móvil firmly believes will benefit from the offer."

Earlier this week, América Móvil met with KPN's unions and said it would stick to the Dutch operator's current strategy.

Analysts suggest that América Móvil might now go to court to challenge the authority of the foundation.

"We wouldn't be surprised to see AMX go to (the European Union) to challenge the authority and legality of the foundation on the back of this move," Morningstar analyst Imari Love told Reuters. "It's clear the foundation is trying to keep KPN Dutch-owned by using this poison pill, which, in effect, has the same impact of golden shares, which are illegal."

América Móvil has been KPN 's largest minority shareholder since June 2012, holding just under 30 per cent of the company. It also holds around 24 per cent of Telekom Austria.

For more:
- see this América Móvil statement
- see this Reuters article
- see this Bloomberg article

Related Articles:
Carlos Slim gives thumbs up to Telefónica's improved E-Plus offer
Slim secures funding for KPN bid, as date gets set for vote on E-Plus deal
Carlos Slim faces first hurdle over KPN bid
Slim's €7.2B move on KPN raises questions about E-Plus deal
América Móvil free to raise stake in KPN

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