Mexico-listed America Movil (AMX) intends to offer up to €8 (US$10.4) per share, or up to €3.2bn (US$4.2bn) in total, to increase its stake in Dutch telco KPN from 4.8% to up to 28% – an acquisition which, if successful, will mark its first…
Mexico-listed America Movil (AMX) intends to offer up to €8 (US$10.4) per share, or up to €3.2bn (US$4.2bn) in total, to increase its stake in Dutch telco KPN from 4.8% to up to 28% – an acquisition which, if successful, will mark its first significant investment in Europe.
The telecoms giant, controlled by Mexican tycoon Carlos Slim, said in a statement its intended offer price reflects a premium of about 23.5% above the closing price of KPN ordinary shares on 7 May.
AMX said it would finance the acquisition with available cash.
It has informed the Dutch Authority for Financial Markets (AFM) of its intended offer and said it plans “to work constructively with KPN management” on the matter.
Once it has secured regulatory approval, America Movil said it will make a formal offer – something it expects to take place by early June at the latest.
The company said its attempt to acquire “an important minority stake” in KPN is a result of its evaluation of expansion opportunities outside the Americas.
“For America Movil, geographic diversification has been key as it has provided greater stability to its cash flow and profitability and contributed to strong credit ratings,” the company said.
It added that it supports KPN’s strategic plans “as they have been communicated to date” and plans to build a “constructive long-term relationship with its management, supervisory board and shareholders.
“America Movil believes that both companies will benefit from their mutual experience in the sector in both technological and commercial areas, and it hopes to explore with KPN areas for potential cooperation, including but not limited to roaming, procurement, distribution of content and marketing arrangements.”
KPN, which posted disappointing results for the 2011 financial year, said it has “taken notice” of America Movil’s offer and that further announcements will be made in due course.
A spokesperson for the Hague-based operator confirmed it is “moderately positive” about the offer, but declined to comment further.
KPN’s share price rose more than 20% after news of the offer broke, which Bernstein Research said suggests the market expects either a full bid – or bids from others – to follow.
“[America Movil’s] intentions are far from clear at this point; the share should be up just €0.35 on the basis of this stake purchase alone,” Bernstein said. “It seems unlikely that [America Movil] can control KPN with just a 28% share, but if they are able to bring deep pockets and more solutions to the end game in Germany [where KPN also operates] they may be able to exert influence beyond a minority stake.
Bernstein said it expects KPN’s share price to settle back down “unless and until” America Movil makes a formal bid.”
