Carlos Slim’s America Movil (AMX) has reduced its stake in Dutch telco KPN to 27.1%, as the two companies set about re-establishing commercial partnership agreements ended during the Mexican telco’s failed takeover attempt.
AMX revealed in its…
Carlos Slim’s America Movil (AMX) has reduced its stake in Dutch telco KPN to 27.1%, as the two companies set about re-establishing commercial partnership agreements ended during the Mexican telco’s failed takeover attempt.
AMX revealed in its annual report that it has cut its stake in KPN from 29.7% to 27.1%, which excludes the class B preference shares held by the foundation charged with protecting the Amsterdam-based company and its stakeholders.
The foundation’s acquisition of the preference shares last August effectively blocked AMX’s €7.2bn (US$9.6bn) intended takeover bid. The preference shares are expected to be cancelled next month, having received shareholder approval in January.
KPN CEO Eelco Bloc told the Financial Times that the two companies’ relationship is better now than it was after AMX withdrew its intended bid in October, but not as good as in the pre-offer days. He said AMX representatives on the KPN board are “participating in a constructive manner”.
The CEO explained that the companies will re-form working groups designed to align their business practices, beginning with the joint procurement of technology. These groups fell apart when the companies ended their ‘relationship agreement’ during the takeover turmoil.
In October, AMX said the KPN foundation had made its €2.40 per share offer “impossible”. Meanwhile, KPN denounced AMX for its refusal to improve an offer it had deemed insufficient, saying Slim’s company also had not provided an acceptable proposal on its commitments to KPN stakeholders.
Bernstein Research analysts said in a note to investors that they do not believe Slim will make a renewed bid for KPN as he has “more pressing interests” elsewhere. In their view, AMX will therefore strive to maximise the value of its stake ahead of a strategic sale or trade.
The analysts suggested AMX’s stake reduction may have been motivated by the risk of KPN share buybacks pushing it over the 30% takeover threshold under Dutch law, falling Latin American currencies and the year-end report.
Another source with knowledge of the European telecoms sector said a hostile bid for KPN in the future is unlikely to succeed. In his view, a prospective bidder would wait until after the European Commission takes a decision on KPN’s planned sale of its German unit E-Plus to Telefonica before making a move to get a better idea of pricing.
“Or it could wait until KPN says it will return X percentage of shares to shareholders,” he added.
The source said AMX’s willingness to re-establish commercial partnership agreements with KPN indicates it wants to look after its investment in the company and is not necessarily a sign it is considering another takeover bid.
Separately, there has been considerable speculation recently that AMX might seek to boost its stake in its other European telecoms asset, Telekom Austria (TA).
In January, AMX consolidated most of its shares in the Austrian incumbent under a single subsidiary, Carso Telecom, boosting its voting rights from 23.674% to 26.81%. The following month, AMX CEO Daniel Haj described the company’s stake in TA as an “anchoring” long-term investment with a positive outlook.
E-Plus deal to trigger consolidation – KPN CEO
Meanwhile, Bloc also told the Financial Times that he is confident the E-Plus deal will secure regulatory approval, although he is unsure what concessions will be required. The CEO expects that, if approved, the deal will trigger a wave of in-country mobile consolidation, followed a few years later by larger-scale consolidation deals. KPN could be a consolidator or take part in a “consolidation scheme”, he noted.
