America Movil SAB, owned by Mexican billionaire Carlos Slim, will launch a 7.2 billion euro ($9.6 billion) bid for the part of Dutch telecom company Royal KPN NV it doesn’t already own, in a challenge to a rival offer for KPN’s prized German mobile group E-Plus. Movil’s 2.40 euros per share bid for KPN announced Friday offers a 20 per cent premium on Thursday’s closing price, valuing the company’s stock at around 10.3 billion euro, and the 70 per cent it doesn’t already own at 7.2 billion euro.
The news of the approach sent KPN shares 17 per cent higher to 2.34 euro in Amsterdam.
The offer price is miles above the 1.60 euro KPN’s shares were trading at in mid-July before Movil’s arch-rival, Telefonica SA, announced plans to buy E-Plus from KPN for around 8.1 billion euro.
'The Telefonica deal was backed by KPN’s management, but most analysts believe Slim wanted E-Plus for himself. E-Plus has a 15 per cent stake in the German market that would be near-impossible to build from scratch.
Movil said it initially invested in KPN two years ago to improve its geographical diversity. Now it wants a controlling stake 'to facilitate greater operational cooperation and co-ordination between the two companies.'
KPN spokesman Ward Snijders said on Friday that the company was 'studying' the America Movil bid.
KPN has run into financial trouble after the increasing use of smartphones began eating into margins in The Netherlands, where KPN has 40 per cent of the mobile market. Customers with smartphones decided to ditch KPN’s highly priced SMS text messaging service en masse for cheaper Internet-based services such as WhatsApp and Skype, and KPN’s profits plunged.
Then KPN paid more than it had expected to the Dutch government in an auction for fourth generation mobile licenses, loading its balance sheet with debt.