America Movil threatens to scrap KPN takeover bid

Fri Aug 30, 2013 4:53pm EDT
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By Robert-Jan Bartunek and Tomas Sarmiento

BRUSSELS/MEXICO CITY (Reuters) - America Movil threatened to abandon its bid for Dutch telecom KPN on Friday, saying it has no plans to raise the 7.2 billion euro ($9.5 billion) offer, after a foundation representing KPN told the Mexican firm to improve its proposal or face a veto.

The foundation, an independent group of former Dutch companies' executives tasked with protecting KPN stakeholders, bought almost 50 percent of KPN's voting stock late on Thursday, moving to block the deal.

America Movil, owned by Mexican billionaire Carlos Slim, responded testily to the foundation's move. Asked whether America Movil could increase its bid for KPN, Slim's chief spokesman, Arturo Elias, told Reuters: "No way."

"We're surprised by the opposition, since current management has stopped investing, modernizing the company, and has lost a lot of clients and market share," Elias said.

Elias also said the company was unwilling to agree to curbs on its managerial involvement in KPN's operations and will have to analyze whether to maintain its nearly 30 percent stake in the company if the takeover offer does not succeed.

The KPN foundation, which was set up when the former state monopoly was being privatized, said it had upped its voting stock to protect the interests of shareholders, employees, customers, trade unions and "Dutch society more generally," because America Movil, Latin America's biggest phone company, had not consulted with KPN before making its offer.

"The soccer rules in Mexico and the Netherlands are the same, but taking over a large company is not soccer. We may have different rules for this here than in Mexico," said Jacques Schraven, a former president of Dutch Shell, who heads the foundation.

He told a news conference on Friday that the group wanted America Movil to make a "fair" bid for KPN and to make binding arrangements with stakeholders such as KPN employees before officially launching its bid.   Continued...