KPN and Telefónica are in advanced negotiations over the future of their German mobile operations, according to Dutch news service NOS, which cited unnamed sources.
KPN is keen to sell its German E-Plus unit as part of its plan to prevent América Móvil from acquiring a larger holding in KPN, while Telefónica has signalled its intent to list its O2 Germany subsidiary.
Without confirming any discussions, KPN said that the company's supervisory board had agreed to "review the strategic options for E-Plus to unlock value embedded in the German business." In a presentation to shareholders, KPN said there is "material synergy opportunity available through in-market consolidations," in a reference to Germany.
This statement triggered Robin Bienenstock, an analyst at Sanford C. Bernstein, to comment: "This seems to us to be a fairly pointed message to Telefónica," Bienenstock wrote in an update to clients. Rabobank analyst Frank Claassen noted: "The timing is interesting. Yesterday Telefónica opened their door, and today KPN did," according to Bloomberg.
However, a Telefónica spokesman emphatically told Reuters that the company is not going to bid for all or part of KPN.
KPN is also actively searching for investors in China and the Middle East who might want to own a substantial stake in the company, according to a report in the Dutch newspaper Het Financieele Dagblad, which cited unnamed sources, with CFO Eric Hageman already said to have spoken to sovereign wealth fund China Investment Corp at the start of this year.
Commenting on the offer from América Móvil, which has been rejected by KPN as "opportunistic," KPN CEO Eelco Blok said on a conference call: "We continue to have constructive discussions with América Móvil on potential synergies," adding that the company was also evaluating the future of its Belgian and Spanish businesses.
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