KPN is set to convene an EGM on 2 October to ask shareholders to approve the proposed sale of German mobile unit E-Plus to Telefonica Deutschland (O2).
Announcing the meeting date today, the Dutch telco said all holders of KPN shares on 4 September,…
KPN is set to convene an EGM on 2 October to ask shareholders to approve the proposed sale of German mobile unit E-Plus to Telefonica Deutschland (O2).
Announcing the meeting date today, the Dutch telco said all holders of KPN shares on 4 September, after the close of trading on the NYSE Euronext Amsterdam, are entitled to vote at the EGM. A simple majority of affirmative votes are required to approve the deal, which KPN’s supervisory and management boards both recommend.
KPN agreed in July to sell E-Plus to O2 in a deal worth €8.1bn, which the Dutch telco says values the German unit at an estimated 9 times its FY 2013 EBITDA.
It is uncertain how KPN’s largest shareholder, Carlos Slim’s America Movil (AMX), will vote at the EGM. Mexico-based AMX announced a €7.2bn intended takeover offer for the nearly 70% of KPN shares it does not already own shortly after the E-Plus sale announcement, prompting speculation that it may try to block the deal.
In a circular to shareholders, KPN said the EGM will take place whether or not AMX launches a formal takeover offer.
In the EGM agenda, KPN reiterated its rationale for the E-Plus sale, saying it believes it will create “significant shareholder value” given the “compelling” implied valuation of E-Plus and resulting synergies. The company added that the deal will improve its “financial flexibility” and enable it to resume dividend payments for the 2014 financial year. Upon completion, KPN intends to focus on its two core markets: the Netherlands and Belgium.
The E-Plus sale is also subject to regulatory approvals. Announcing the deal in July, KPN and O2 said they expect it to close in mid-2014. Various analysts have speculated that remedies, perhaps involving spectrum, will be required.
German antitrust watchdog wants to assess deal
The head of Germany’s Federal Cartel Office (FCO) has reportedly said the proposed E-Plus/O2 tie-up needs to be “investigated closely” as it would have a “considerable” impact on competition.
Andreas Mundt was quoted saying that the deal should be assessed by the antitrust regulator rather than the European Commission, according to Reuters citing an excerpt from a Frankfurter Allgemeine Zeitung (FAZ) article to be published today.
The new combined company would have about a 30% share of Germany’s mobile service revenues, compared with incumbent Deutsche Telekom’s and Vodafone’s approximate 35% each.
Separately, commenting on a German court’s recent decision to override the 2011 antitrust clearance for Liberty Global’s takeover of local cableco KabelBW, Mundt said he would have expected the cartel-ordered conditions on the deal to have had much more effect on competition than they did.
Mundt was also quoted telling FAZ that the FCO is happy for the European Commission to review UK-based mobile operator Vodafone’s proposed acquisition of German cableco KDG, saying it appears to be “rather a complimentary tie-up”.
