America Movil (BMV:AEX) has completed the placement of €750m in three-year bonds exchangeable into shares of KPN (AMX:KPN), the company announced today.
The bonds will pay a coupon of 5.5%, plus additional interest corresponding to 85% of the gross amount of cash dividends and distributions paid in relation to the underlying KPN ordinary shares.
Deutsche Bank is acting as bookrunner, with Merrill Lynch and UBS as co-lead managers.
The company said it would announce later today the reference price it would use to calculate the minimum exchange price based on today’s volume-weighted share price, with the maximum being 27.5% over the reference price.
The offering is expected to close on 17 September.
In May, the Mexican operator completed a similar transaction worth €3bn (US$3.3bn), with Deutsche Bank as sole global coordinator. Those five-year bonds will not pay interest, but be exchangeable at a price of 45% above the volume-weighted average price of the KPN shares on 20 May 2015.
These transactions enable America Movil to receive cash for its stake in KPN, without running the risk of selling them on the market at a discount.
KPN’s share price fell 5.8% to €3.30, giving it a market cap of €14.98bn. The share price has risen 30.67% over the last twelve months.
The Carlos Slim-owned telco, which today owns 21.1% of KPN, bought into the company in 2012, going on to amass nearly 30%despite ongoing discord with its management. America Movil’s relationship with another European target, Telekom Austria, has been significantly more harmonious.