Dutch telco KPN is going all out to convince shareholders not to take up America Movil’s (AMX) €8 (US$9.95) per share offer to boost its stake to 27.7%, dismissing it as far too low to warrant gaining a significant influence over the company.
KPN…
Dutch telco KPN is going all out to convince shareholders not to take up America Movil’s (AMX) €8 (US$9.95) per share offer to boost its stake to 27.7%, dismissing it as far too low to warrant gaining a significant influence over the company.
KPN today [Friday, 1 June 2012] issued a statement saying that, after a careful review of the offer formally launched by Carlos Slim’s Mexico-based telecoms group on 30 May, its supervisory and management boards unanimously recommend shareholders take no action in relation it.
KPN said the offer, which equals total investments of €2.05bn (US$2.6bn), does not reflect the full value potential of the company and may deprive other shareholders of an M&A premium.
As such, KPN said it is continuing to explore “all strategic options to unlock superior value for all shareholders”.
E-Plus under review; Telefonica rules out bidding
The telco also confirmed that it is exploring strategic options for its German unit, E-Plus – something it had previously declined to comment upon.
E-Plus and Belgian unit BASE – which is also subject to a strategic review – performed far better in the 2011 financial year than the Netherlands-based parent company.
Meanwhile, Spanish incumbent Telefonica denied analyst and media speculation it may bid for E-Plus, saying it will not make an offer for any part of KPN. This comes a day after the telecoms group announced plans to list its German unit and possibly others in Latin America in an effort to cut debt and improve liquidity.
Regulatory hurdles in Germany?
In an analysts call in the afternoon, KPN CEO Eelco Blok avoided going into details about chances for a merger of the German unit with Telefonica’s O2 business. Questioned by analysts about potential regulatory issues that could get in the way of in-country consolidation, Blok said detailed discussions with the German antitrust regulator had not taken place so far.
Interim CFO Eric Hageman, however, hinted that remedies could address potential antitrust issues: “It’s not a stretch of the imagination that some of the other players, which would also then benefit from such market consolidation, are able to help,” he said in the call. “And helping basically means that part of the assets you then have to divest, think, for example about a wholesale business, or the MVNO businesses that are in that market, that they could take those on board. “
KPN: AMX offer is “opportunistic”
Further detailing its opposition to AMX’ €8 per share offer, KPN said in today’s statement that “the benefits from KPN’s current transition of its domestic businesses as well as the continued profitable growth in Germany and Belgium are not reflected in the partial offer, which makes the timing of America Movil opportunistic.”
KPN said AMX’s intentions toward the company remain unclear and stressed that, by targeting a stake just under the 30% mark, AMX was avoiding having to make a full takeover bid and deterring others from making an offer for the whole company in the future.
KPN CEO Eelco Blok said AMX is unwilling to enter into a shareholder agreement and did not respond positively to proposals it believes could have benefited all shareholders.
With the acceptance period for AMX’ offer closing on 27 June, KPN has less than four weeks to find alternative investors. Dutch daily Het Financieele Dagblad reported the telco has extended its search to China and the Middle East, where it is actively seeking investors.
KPN said it will release a formal position statement as required under Dutch public offer rules in due course.
