A view of the Telcel building in Mexico City, which also houses the America Movil office, both owned by Carlos Slim.
BRUSSELS/MEXICO CITY: America Movil threatened to abandon its bid for Dutch telecom KPN, saying it has no plans to raise the ¤7.2bn ($9.5bn) 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, said: “No way.”
“We’re surprised by the opposition, since current management has stopped investing, modernising 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 privatised, 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.
Slim’s America Movil denied its bid — at ¤2.40 a share — would put the company’s interests at risk.
“We believe we can help make (KPN) into a better company, one that grows, creates jobs, is more competitive and ultimately is strong enough to remain a major player at home and abroad,” America Movil said in a statement on Friday.
America Movil shares initially rose after the market opening as investors, concerned the deal could threaten the firm’s credit ratings, were cheered by the new hurdles to the acquisition, analysts said. But the stock later pared gains to trade at 12.85 pesos ($0.96) per share amid worries that there could be still room for more talks.
On Wednesday, America Movil met KPN’s labour unions, saying they would stick to the company’s existing strategy.
The foundation said it had been in touch with America Movil this week and called for the company to open negotiations with KPN’s board and the Dutch government.
KPN shares fell 3.41 percent to close at 2.210 euros.
On average, Slim’s telecoms giant paid about ¤3.24 a share for its Dutch stake, including stock bought as part of a rights issue by KPN earlier this year.