KPN said América Móvil's surprise €3.2 billion offer to raise its stake in the company is too cheap, even as the troubled Dutch operator also unveiled a new strategy that it hopes will help improve its fortunes in an increasingly competitive environment on the Dutch mobile and fixed markets.
"KPN is of the opinion that 8 euros per ordinary KPN share substantially undervalues the company," KPN said in a statement, according to Reuters. "KPN will seek further clarification as to América Móvil's intentions ... In the meantime, KPN will explore all strategic options."
Reuters reported that KPN has been struggling to reverse a decline in revenue, profit and market share in its fixed-line and mobile operations. KPN and other mobile phone operators in the Netherlands are also under antitrust investigation for possible price-fixing.
The operator is now clearly intending to repair some of the damage following a torrid year in 2011 with a new strategy that will also see the launch of a new marketing slogan, "KPN doet 't gewoon" ("KPN just works"), starting in August.
During the presentation of the strategy, CEO Eelco Blok made it clear that KPN's focus will be on improving customer service and the introduction of new mobile services. Other plans include upgrades to the operator's mobile network: Ericsson will upgrade around 4,000 base stations with new equipment, as well as help boost capacity and coverage and prepare for the launch of LTE.
Blok did not comment on the announcement from América Móvil that it plans to increase its stake in KPN, and the company noted in a press release that the meeting was already planned long before the bid was announced.
As has been widely reported, América Móvil, the biggest mobile phone group in Latin America that is controlled by billionaire Carlos Slim, made a surprise offer to boost its stake in KPN to as much as 28 percent as part of a long-term investment strategy that would give it a foothold in Europe.
According to Reuters, some analysts believe América Móvil's offer could be a prelude to a full bid. Indeed, some say Carlos Slim has long harboured ambitions to gain a strong foothold in the European market, and KPN also has interests in key countries such as Germany with E-Plus.
"We believe the 28 percent stake could be a first step to try to gain full control of KPN," Reuters cited SNS Securities as saying in a note. "Buying an incumbent operator is politically not without risk, which may explain the cautious approach of first acquiring a 28 percent stake."
However, Bloomberg quoted América Móvil CFO Carlos Garcia-Moreno as saying that the Mexican group has no plan to fully take over KPN.
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