KPN could restart talks with América Móvil

KPN has not ruled out a resumption of talks with América Móvil after the Mexican company withdrew its €7.2 billion ($9.74 billion) bid to buy the Dutch operator because it said it would be impossible to meet its goal of expanding its stake to more than 50 per cent due to resistance from an independent KPN foundation.


According to Reuters, KPN CEO Eelco Blok said the situation is "not yet cut-and-dried," although he would not be drawn on what price would be acceptable to the Dutch operator. "I'm not going to say which price we wanted because there is a possibility that we will be sitting around the table again," Blok said in a conference call with reporters, according to Reuters.

Price has clearly been a major issue; KPN has said América Móvil's offer of €2.40 per share was too low: "I have said internally that it seemed like América Móvil wanted front-row seats for a dime," Blok said.

However, Blok also said that KPN could exist as an independent company and does not "need another party to carry out our strategy," reported Dow Jones Newswires.

However, analysts question whether KPN is strong enough to survive in a very competitive Dutch market. "KPN now has to prove it can create value for shareholders independently," Rabobank analysts Frank Claassen and Philip Scholte wrote in a note to clients, according to Dow Jones Newswires. "We believe that this will be quite a challenge in a Dutch market which will become only more competitive."

One unnamed  investor also told Reuters that América Móvil could make another bid for KPN once the sale of the Dutch operator's E-Plus unit has been given regulatory clearance. "I'd expect América Móvil back in the game in six months once there is clarity on E-Plus from an antitrust point of view," the investor said.

In the meantime, it's not yet clear what the Carlos Slim-owned group will do with its current 30 per cent stake in KPN. América Móvil has made a significant paper loss on those shares, which have fallen about 70 per cent since Slim acquired them for €8 each last year, Bloomberg said.

After being thwarted for the time being in the Netherlands, some analysts also suggest Slim may turn his attention to Austria, where América Móvil owns a 24 per cent stake in Telekom Austria.

"People think, maybe Slim is now moving to Telekom Austria if KPN didn't work out. However, this shows that Slim doesn't want to expand in Europe at any cost," Guenther Schmitt, fund manager at Raiffeisen Capital Management, told Reuters.

The current situation certainly must be far from satisfactory for Slim, who had made no secret of his interest in expanding in Europe. The group was dismayed by the developments in the Netherlands, when its bid for KPN was effectively blocked after the KPN foundation increased its stake in the Dutch operator to just under 50 per cent. The foundation has said it was not its intention to scupper the deal.

For its part, the Mexican group is refusing to describe the latest developments as a setback: "It's not a setback; we are always open to consider possibilities in Europe and elsewhere," Arturo Elías Ayub, Slim's spokesperson and son-in-law, told Forbes.

Under Dutch law, unless América Móvil makes an offer within six business days from the withdrawal date it has to wait another six months before making a new bid. As things stand, the Mexican group has not ruled anything out.

For more:
- see this Reuters article
- see this Bloomberg article
- see this Forbes article
- see this Dow Jones Newswires article (sub. req.)

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