KPN shareholders approve E-Plus sale

Shareholders in Dutch operator group KPN have approved the sale of German subsidiary E-Plus to Telefónica Deutschland at an extraordinary general meeting.

The German arm of the Spanish operator group recently increased its bid for the business unit, offering KPN €5bn in cash and a 20.5 per cent stake in Telefónica Deutschland post transaction. The total transaction value stands at €8.55bn up from the initial offer of €8.1bn.

KPN said that the majority of the €5bn will be used to further increase financial flexibility and help recommence dividend payments to its shareholders for the financial year 2014. KPN said the deal will give it a strong credit profile, and allow it to focus on The Netherlands and Belgium.

However, KPN also admitted last month that despite the size of the deal, it is expecting to make a loss of €3.7bn that it can deduct against taxes as a result of the sale of its German subsidiary E-Plus to Telefonica Deutschland.

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The group said it has reached an agreement with the Dutch tax authorities related to the size of the tax book loss which is expected to be recognised upon completion of the sale of E-Plus.

KPN is currently in discussions with Mexican operator group America Movil over a proposed takeover. The Latin American group currently owns a 29.8 per cent stake in KPN and announced in August its intention to acquire all outstanding shares in the operator as it steps up its efforts to expand further into Europe.