KPN rejects América Móvil offer as undervalued, hires strategic advisors

KPN has dismissed América Móvil's unsolicited offer of €2.64 billion for 27.7 per cent of the company saying it substantially undervalues its assets. The Dutch-based telco has responded by announcing the appointment of JP Morgan and Goldman Sachs to advise it on its strategic options.


América Móvil, owned by Mexico's Carlos Slim, has confirmed it has no interest in KPN's German E-Plus mobile-phone unit and regards the Dutch company's turnaround plan as credible, América Móvil CFO Carlos Garcia-Moreno said this week, according to a Bank of America Merrill Lynch note to clients, which was obtained by Bloomberg.

The offer concludes on June 27 and América Móvil has said it will be happy with whatever level of acceptance it receives from current KPN shareholders--indicating that an increased offer is unlikely.

Commenting on the bid, Nick Brown, an analyst at the brokerage firm Espirito Santo, echoed the viewpoint of an insider by saying he wasn't surprised that América Móvil had not raised its price.

"They believe it's a reasonable offer at 24 per cent premium to the KPN price before the announcement," he told Reuters. "There is nothing KPN can do to stop shareholders from accepting it, although it can try to convince them that selling off the Belgium and Germany businesses would be worth more."

Fresh reports from Bloomberg claim that América Móvil executives held talks recently with KPN management over joint handset purchases, other hardware procurement and KPN's international long-distance unit. This would indicate that KPN CEO Eelco Blok is considering an agreement with América Móvil despite the public statements that the Mexico City-based operator's offer remains unattractive.

Slim is thought to have recently accelerated his search for a European foothold as part of his strategic plan to expand beyond his Latin American telco empire. Over the past decade he has attempted to make acquisitions in Spain and Italy, and also looked at opportunities over the past 18 months in Poland and Serbia. Recent reports suggest he has been in contact with Telekom Austria via its major share holder, the country's government.

For more:
- see this Dow Jones Newswires article
- see this Bloomberg article
- see this Reuters article
- see this separate Bloomberg article

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