America Movil (AMX) has yet to formalise a bid for Dutch incumbent KPN due to a disagreement with the target’s management over price.
KPN is reportedly arguing that the Mexican telco’s €7.2bn (US$9.6bn) offer is too low following a decision by tax…
America Movil (AMX) has yet to formalise a bid for Dutch incumbent KPN due to a disagreement with the target’s management over price.
KPN is reportedly arguing that the Mexican telco’s €7.2bn (US$9.6bn) offer is too low following a decision by tax authorities to allow it to recognise a €3.7bn tax loss on the sale of its German unit E-Plus to Telefonica.
Yet AMX views its offer as already accounting for the tax loss and feels its valuation is justified given new competition in the market in the form of Ziggo, according to people with knowledge of the discussions cited by Bloomberg.
AMX is also encountering difficulty with an independent foundation charged with protecting KPN, which exercised a poison pill to block the offer, giving it 50% of the voting rights.
The foundation represents shareholders, employees, customers and trade unions, and has concerns over potential job losses and AMX’s investment plans.
At the end of last week, AMX said that it may launch a formal offer for KPN – which it had originally hoped to make last month – before the end of October.
In August AMX proposed to buy the 70% of KPN it does not already own for €2.40 per share, equal to a total €7.2bn. This values the entire company at €10.2bn.
Meanwhile, KPN shareholders, which include AMX, are set to vote tomorrow on the Dutch telco’s planned sale of E-Plus to Telefonica.