Carlos Slim’s America Movil (AMX) has more than doubled its stake in Dutch telco KPN to 20.92% via 27 transactions outside regular market trading, bringing it close to its 27.7% target shareholding.
The Mexico-based telecoms group disclosed that it…
Carlos Slim’s America Movil (AMX) has more than doubled its stake in Dutch telco KPN to 20.92% via 27 transactions outside regular market trading, bringing it close to its 27.7% target shareholding.
The Mexico-based telecoms group disclosed that it paid between €7.51 and €7.70 for the extra 175 million ordinary KPN shares – which, as with earlier transactions, is significantly less than the €8 per share it is offering KPN investors as part of its tender offer.
KPN shares dropped to a six-week low following the announcement, which analysts have speculated suggests investors believe AMX may cancel its tender offer.
Slim’s group can acquire the extra 6.78% stake it needs to reach its target via the open market – and, based on previous transactions, likely at a lower price than its €8 per share tender offer.
AMX’ latest move surely came as a huge blow to KPN, which just yesterday reaffirmed its contention that the tender offer “significantly undervalues” the company and again recommended shareholders not accept it.
KPN has reiterated its concern about Slim’s group gaining a “significant influence” over the company, saying that a 27.7% would enable it to effect strategic decisions.
European expansion plans
AMX’s stake increase in KPN forms part of broader expansion plans into Europe. Late last week, the company agreed to acquire Austrian investor Ronny Pecik’s approximate 21% stake in Telekom Austria: 5% immediately and the remainder when it secures the requisite approvals.
In a conference call on its European investment strategy, AMX’s CFO Carlos Garcia Moreno said that while it maintains good organic growth in its home markets in Latin America, the company is running out of “meaningful M&A opportunities” there.
He said AMX concluded some European telcos appeared attractive, if viewed from a long-term perspective, but that AMX will take a relatively cautious approach to expanding into the region. “In the past, we have had no qualms going to a new country and fully taking over an operation, but in Europe it will be different,” the CFO said, telling listeners that AMX was not suitably prepared to take on operational duties in Europe.
Long term investments; focus on KPN and TA
He added America Movil is mindful of taking on too much debt which would come with a full takeover as this would negatively affect its credit ratings. He stressed the importance of AMX’s ratings that have so far afforded it good access to capital markets and attractive funding rates.
“We are set to enter into long-term strategic partnerships that allow us to establish mutually-beneficial alliances without having to consolidate sizable debts or take undue risks,” Moreno said. The CFO emphasised the importance of respecting the national identity of the incumbents it has bought into and said the company was not looking at any more acquisitions for now as it was focusing on defining its relationships with KPN and Telekom Austria. He also said the company had to consider how much it was leveraged before it considered any further acquisitions.
