América Móvil drops KPN takeover bid

Latin American operator group América Móvil has abandoned its attempt to acquire Dutch operator KPN. The Mexican group said a blocking move made by the KPN Foundation in August had left it unable to “fulfil its aim” with the deal.

In August, following América Móvil’s €2.40/share offer, the KPN Foundation exercised a share option that gave it almost 50 per cent of the voting rights in the Dutch telco, with a view to driving further negotiation.

The Foundation said in a statement at the time that it planned to retain these shares only temporarily but that it had made the move to protect the interests of a range of KPN stakeholders in the face of what it perceived to be a hostile takeover bid from the Mexican operator. In particular it questioned América Móvil’s intentions and commitments to a wide range of stakeholders, including employees, subsidiaries, trades unions, the Dutch Government and “Dutch society more generally.”

But it may now be holding on to those shares for a little longer than anticipated. América Móvil claims that it has sought to address the Foundation’s concerns and that the real issue is price. In a statement released Wednesday, it said there had been “multiple conversations with representatives of KPN’s Supervisory Board and Board of Management” focused on, among other things “strategic direction, employment, national security, social policies and social plans, and minority shareholder protection.”

But these had proved fruitless, it said. “As of the date of this announcement, AMX has not received comments on such proposals from KPN, who made any subsequent discussions contingent upon an increase of the offer price under the Intended Offer.”

The Mexican operator reiterated its belief that KPN needs a partner with “scale and long-term vision” to address the challenges of the European market, arguing that KPN shareholders were not given the freedom to make their own decision regarding its offer.

KPN hit back in a statement of its own, claiming that América Móvil “has not improved or shown any willingness to improve the Intended Offer of €2.40 per share”.

“From the outset KPN has stated to América Móvil that, in the view of the KPN Boards, the Intended Offer did not reflect sufficient value for securing a positive recommendation from the Boards. In addition, the KPN Boards were not able during their numerous discussions to obtain an acceptable proposal on the content, firmness, duration and enforceability of América Móvil´s commitments to KPN’s stakeholders including shareholders, employees, customers, trade unions and Dutch society more generally.”

Chairman of the Supervisory Board Jos Streppel and Eelco Blok, CEO and chairman at KPN, added that KPN has gone through a transition period in The Netherlands recently, where increased investments in networks, services and customers have strengthened the business.

“In addition, the sale of E-Plus at an attractive price will provide increased financial flexibility to support our long-term strategy. KPN will continue to focus on its market leading position in The Netherlands and its strong challenger position in Belgium,” they said in the statement.

According to news agency Reuters, KPN CEO Eelco Blok has suggested may yet resume over an amended bid from the Mexican group.