Spain's telecom giant Telefonica improved its offer for KPN's German unit E-Plus, winning support from the Dutch telecom group's biggest shareholder, America Movil.
Mexican billionaire Carlos Slim's group, which now owns 29.77 per cent of KPN, said it still plans to go ahead with its separate €7.2 billion bid in cash for the remaining shares in the Dutch group it does not already own.
KPN, Telefonica and America Movil said that the Spanish telecoms company had agreed to pay the equivalent of €8.55 billion for E-Plus, compared with its earlier offer of €8.1 billion. KPN will receive €5 billion in cash for E-Plus and will get a bigger stake in Telefonica’s German business of 20.5 per cent, compared with the 17.6 per cent previously agreed.
Telefonica will sign an option to buy back 2.9 per cent of its subsidiary after a year at a price of €510 million. Winning Slim’s support increases the chance that the German deal will go though. People close to the matter said at the time that his company viewed the previous offer as too low and fraught with regulatory risks.
"Positive news, with reduces the uncertainty for the operation following the takeover bid for KPN by America Movil," Spain's Banco Sabadell said in a note to clients today.
Shares in Telefonica rose 0.88 per cent at €10.85 at the opening of the Madrid stock exchange, while KPN shares were up 2.39 per cent at €2.316 in Amsterdam.
Pedro Oliveira, analyst at BPI, also said Slim's support increased the odds of the deal getting past the regulator. "We continue to stress that the operation is subject to regulators' approval and despite the support of America Movil there are still risks for the operation and to the value of the operation," he said in a note.
KPN has so far resisted Slim’s move to increase his grip over the Dutch group, and an independent foundation that has the power to block KPN’s takeover has expressed concern over the proposed bid. In a statement on Monday, America Movil said it believed that by acquiring a majority stake in KPN, both companies could benefit from greater operational co-operation and co-ordination.
“By achieving majority ownership, AMX believes it will be able to support KPN to a greater extent with its investment plans in a rapidly changing European environment,” the Mexican group said in a statement.
Reuters
