America Movil offers $4.2 billion for KPN stake
By Gilbert Kreijger and Sara Webb
AMSTERDAM (Reuters) - America Movil AMXL.MX, the telecoms group controlled by Mexican tycoon Carlos Slim, has offered to buy a stake worth up to 3.2 billion euros ($4.2 billion) in Netherlands-based KPN NV KPN.AS, seeing it as a base for potential expansion in Europe.
America Movil, which is seeking up to 28 percent of KPN, sees the move as a long-term investment that would give it a presence in Europe at a time when the Mexican group has run out of opportunities to expand at home, its chief financial officer said on Tuesday.
KPN shares surged more than 20 percent to their highest since early April, bouncing from a seven-year low set earlier this month. KPN welcomed the offer, saying it was "moderately positive" and showed the undervaluation of its shares.
America Movil is the biggest mobile operator in Latin America and a major cash cow for Slim, ranked by Forbes magazine as the world's richest man, who built his empire by purchasing troubled companies and turning them around.
"America Movil is a long-term investor, we think if the company (KPN) executes (its strategy) well, it will perform well," Carlos Garcia Moreno, America Movil CFO, told journalists, adding there was scope to cooperate in areas like roaming, content, marketing and procurement.
Moreno said it was too early to say whether America Movil would do any other deals in Europe, but suggested KPN would allow it to get a closer look at the European markets.
"KPN is the target for our first investment. Europe is facing some times which are economically challenging. We have a long-term investment horizon. We've taken our time. This one seems to make a lot of sense," Moreno told reporters.
Moreno said the Mexican company had few opportunities to expand in Latin America, while Europe appeared attractive because of a similar cultural identity. Continued...