America Movil Succeeds in Raising Stake in Royal KPN
06/27/2012| 06:13pm US/Eastern
--Mexican billionaire Carlos Slim gets foothold in European market
--Shares tendered exceed maximum amount of offer
--America Movil seeks "constructive dialogue" with KPN
(Updates with additional details, comment from company official)
By Anthony Harrup and Archibald Preuschat
MEXICO CITY--Mexican telecommunications heavyweight America Movil SAB (AMX, AMX.MX), seeking a foothold in the European market, said Wednesday that its offer to raise its stake in Royal KPN NV (KKPNY, KPN.AE) of the Netherlands to 27.7% ended with the number of shares tendered exceeding the amount it plans to buy.
America Movil, controlled by billionaire Carlos Slim, said it now has 24.9% of KPN and will buy an additional 2.8%. When the offer expired Wednesday, shares tendered were enough to raise America Movil's stake above the maximum 27.7%. The remaining shares will be accepted based on a preset procedure, the company said.
America Movil, Latin America's largest wireless service provider, is expanding into Europe with minority stakes in KPN and Telekom Austria AG (TKA.VI), of which it plans to acquire up to 23%.
While KPN management opposed the EUR8-per-share offer as undervaluing the company, Telekom Austria welcomed the new investor aboard. America Movil estimated the cost of the two acquisitions at $4.9 billion.
The stake in KPN makes America Movil the Dutch company's largest shareholder.
"America Movil is pleased to have achieved its objective of securing a meaningful minority stake in KPN. As a supportive, long-term shareholder, we now look forward to an ongoing, constructive dialogue with KPN and to leveraging America Movil's significant scale and financial strength for the benefit of all KPN stakeholders," America Movil said in an emailed statement.
America Movil Chief Financial Officer Carlos Garcia Moreno, in a conference call last week with analysts, reiterated that the company's intention is to be a "strategic long-term partner" of the European concerns. He said America Movil isn't looking to take full operational responsibilities, but is seeking an understanding of the European telecommunications markets.
Mr. Garcia Moreno said Latin America will remain America Movil's core market and main priority, but that merger-and-acquisition opportunities in the region have been largely exhausted, in some cases by regulatory restrictions.
America Movil had 246 million wireless subscribers in 18 countries in the Americas at the end of March, including 20 million in the U.S., where it operates as a virtual mobile-network operator. KPN is the largest phone operator in the Netherlands and has significant operations in Germany. Last week, the company put its Belgian operations up for sale.
America Movil shares traded on the Mexican stock market closed up 0.1% Wednesday at 17.21 pesos ($1.27).
Write to Anthony Harrup at firstname.lastname@example.org and Archibald Preuschat at email@example.com