America Movil withdraws €7.2-bn bid for Dutch telco Royal KPN
18 Oct 2013
Mexican telecom group America Movil, owned by billionaire Carlos Slim Helu, yesterday withdrew its €7.2 billion ($9.7 billion) bid to acquire Dutch telephone company Royal KPN.
The decision, disclosed in a regulatory filing, came after KPN's independent foundation, last month exercised a call option giving it just under 50 per cent and control of voting rights in the company.
The foundation, an independent group of the Dutch companies' former executives, made the move to thwart America Movil, in an attempt to safeguard the interests of KPN and its shareholders, also halved America Movil's stake in the company from 30 per cent to 15 per cent.
In August, America Movil tabled a €2.40 a share in cash bid for the remaining 70 per cent it does not already own in the Dutch company, valuing it at €10.2 billion ($13.6 billion).
KPN rejected the deal saying that it was expecting at least €3 a share.
The foundation believes that the offer is not in the best interests of the company, and alleged that América Móvil had not informed KPN about its plans before making the offer.
America Movil refuted the allegations saying it had discussed the deal with KPN's management, its board and the Dutch government, all of whom had favoured the deal. It added that it was still negotiating a new agreement, but would withdraw if the foundation maintains its position.
America Movil said in a statement that it "has carefully reviewed the options available to it in relation to the exercise of the call option by the foundation ....... and now concludes, in view of the foundation's position and the discussions with KPN, that (the) aim to acquire more than 50 percent of the voting rights in KPN... will not be met by making the intended offer."
"We have conducted a thorough process with regard to the intended offer. Throughout this process we have weighed the interests of all our stakeholders on financial and non-financial matters. We have not been able to agree on an offer price, and other terms and conditions, which would reflect appropriate value and minority shareholder protection for selling control of KPN. We remain fully committed to serving our customers in the best possible way and creating value for shareholders," KPN said in a statement.
America Movil is South America's largest cellphone carrier with 246 million subscribers, including 20 million in the US.
In May, it agreed to acquire Simple Mobile Inc., a unit of T-Mobile USA, to expand in the US (See: Carlos Slim's America Movil to acquire T-Mobile's Simple Mobile to boost presence in the US), and is reportedly eyeing a stake in Telekom Austria. (See: America Movil to buy 21% in Telekom Austria from Ronny Pecik )
The Hague, Netherlands-based KPN has 6.3 million fixed-line telephone customers. and more than 33 million mobile subscribers in the Netherlands, Germany, Belgium, France, and Spain.
