KPN moves against América Móvil’s acquisition

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Dutch telecom operator KPN has had a busy month attempting to counter a move by Mexico-based operator América Móvil, which is looking to increase its presence in the European market.

About a month ago, América Móvil – the wireless carrier group controlled by Mexican Carlos Slim, offered about $10 (8 Euros) per share to increase its stake in KPN. Last week Reuters reported that KPN was looking to begin taking offers on the sale of its Belgian BASE mobile phone business. And yesterday The Financial Times, citing people familiar with the matter, reported that the Dutch telecom company is still considering spinning off its E-Plus German mobile business.

The moves show KPN’s efforts to fend off an unwanted buy-in by América Móvil.

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The partial tender offer would increase América Móvil’s stake in KPN from 4.8% to approximately 28%. However, KPN responded that the offer was too low and substantially undervalued the company. At that time, the Dutch company said it would seek further clarification as to América Móvil’s intentions and, in the meantime, it would explore all strategic options.

So that’s what KPN has done.

By spinning off its German mobile business E-Plus, KPN could open the way for E-Plus to deal with O2, the German mobile subsidiary of Telefonica, which the Spanish operator announced it was seeking to list.

And by selling its Belgian mobile phone business KPN hopes to raise more than $2 billion and help to avoid selling shares to América Móvil.

Carlos Slim’s company is looking to boost its presence outside its home region. In addition to a play to increase its share in European operator KPN, América Móvil said its U.S.-based subsidiary Tracfone Wireless has entered into an agreement to acquire mobile virtual network operator Simple Mobile, which offers SIM-based services using T-Mobile USA’s network.

By making a tender offer for KPN, America Movil is looking to expand its base in the European mobile market. Its biggest rival, Telefonica, already benefits from a presence in a variety of diverse markets, including its home market Spain, UK, Germany, and other European markets, plus Latin America.

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