Rumour Mill: KPN rejects Telefónica bid for E-Plus

KPN rejected Telefónica's offer to acquire its German subsidiary E-Plus for undervaluing the asset, according to a report from Dow Jones Newswires.

The report, which cited unnamd sources familair with the matter, said the Spanish operator is said to have made the bid--despite its €57 billion debt--as a counter move to the partial offer made by América Móvil for KPN. Telefónica was reported to have seen América Móvil's attempt to gain a significant shareholding in KPN as a "declaration of war," one source said.

América Móvil has offered €8 per share in a partial tender offer, to raise its stake in KPN from its current 5 per cent to almost 28 per cent in a bid valued at €2.64 billion. This offer has also been rejected by KPN as undervaluing the company.

In a separate, but associated move, Telefónica has indicated that it could offer 20 per cent of O2 Germany in an IPO, according to a Bloomberg report, which also cited unnamed sources.

"It's hard to predict a timeframe on the IPO as all depends on market conditions," Bruno Lippens, a fund manager with Geneva-based Pictet Asset Management, told Bloomberg. "I assume they want to list O2 [Germany] at a fairly high multiple, making it overly dependent in future growth and hence very vulnerable to disappointments."

One option under consideration, according to Bloomberg, is combining O2 Germany and E-Plus, people familiar with the matter have said.

Such a move would see a merged O2 Germany and E-Plus becoming Germany's largest mobile operator with more than 41 million subscribers, and quarterly revenues of about €1.5 billion.

Separately, France Telecom's CEO Stephane Richard told attendees at the company's annual shareholder meeting that América Móvil's bid for a substantial holding in KPN could trigger a shakeup in the sector which could reduce the number of operators, according to Reuters.

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

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