(In 2nd paragraph, corrects to show America Movil is Latin America’s biggest phone company, not that it is Latin America’s biggest company)
By Tomas Sarmiento and Elinor Comlay
MEXICO CITY, Oct 16 (Reuters) - America Movil, the phone company controlled by billionaire Carlos Slim, said it would not go ahead with a plan to boost its stake in KPN after the Dutch telecom’s foundation blocked the Mexican company’s bid.
The announcement on Wednesday was a blow to the expansion plans of Latin America’s biggest phone company, which made its first foray outside of the region with its acquisition of KPN and Telekom Austria shares last year.
America Movil had accumulated nearly 30 percent of KPN’s stock and it was not clear what would happen with that. America Movil declined to comment and KPN’s foundation was not available for a comment.
Investors appeared to welcome the news, since it prevented a planned outlay of at least 7.2 billion euros ($9.52 billion), and America Movil’s shares soared more than 6 percent immediately after the announcement before settling about 3.46 percent higher.
America Movil, which has never made an unsolicited offer, was taken aback by the KPN foundation’s surprise move in August. Slim’s son-in-law and main spokesman Arturo Elias said at the time that the company had been shown “a total lack of respect.”
The company, in an uncharacteristically long statement in September, said it was negotiating with management and defended its offer, saying America Movil planned to invest heavily in KPN if it was able to control the company.
“The exercising of the call option by the foundation obstructs the completion of (the deal) as it is detrimental to KPN shareholders who want to participate in the deal,” America Movil said in a filing.
“I think they ran out of patience,” Andres Audiffred, an analyst with Ve Por Mas, said of America Movil.
America Movil’s shares have been under pressure this year as investors question the value of Slim’s expensive European foray, which marks a big step from the company’s familiar Latin American turf.
Before the foundation acted to block the offer, America Movil had initially planned to proceed with its bid in September. America Movil said it could help the Dutch telecom with important infrastructure investments. (With reporting by Simon Gardner, Gabriel Stargardter and Noe Torres in Mexico City and Robert-Jan Bartunek in Brussels; Editing by Leslie Adler and Maureen Bavdek)