UPDATE 4-America Movil will not buy more KPN; ponders current stake

jueves 17 de octubre de 2013 00:39 CEST

(Adds comments from KPN statement, link to Breakingviews)
    By Tomas Sarmiento and Elinor Comlay
    MEXICO CITY, Oct 16 (Reuters) - America Movil, the phone
company controlled by billionaire Carlos Slim, on Wednesday said
it would not go ahead with a plan to boost its stake in KPN, and
has not yet decided whether to keep its current position in the
Dutch telecom company.
    The announcement on Wednesday was - at least in the short
term - a setback to the expansion plans of America Movil, Latin
America's biggest phone company,  which made its first foray
outside of the region with its acquisition of stakes in KPN and
Telekom Austria last year.
    America Movil said it has not yet made a decision
on what to do with its equity stake in KPN, whose share
price is well below what America Movil paid. "We haven't made
that decision," Arturo Elias, a spokesman for Slim and also his
son-in-law, told Reuters.
    The company, which had accumulated nearly 30 percent of KPN,
saw that stake effectively chopped in half by a foundation set
up to protect KPN shareholders' interests, which in August
executed an option to acquire almost 50 percent of KPN's voting
    America Movil, which has never made an unsolicited offer,
was taken aback by the KPN foundation's surprise move in August.
Elias said at the time that America Movil had been shown "a
total lack of respect." 
    "I think they ran out of patience," Andres Audiffred, an
analyst with Ve Por Mas, said of America Movil.
    The foundation, and KPN, sought a better price than the 2.40
euros America Movil offered and negotiations foundered as the
Mexican company refused to budge on its offer. KPN shares closed
at 2.43 euros on Wednesday. 
    On average, Slim's telecoms giant paid about 3.24 euros a
share for its Dutch stake, including stock bought as part of a
rights issue by KPN earlier this year.
    KPN's independent foundation said it had not intended to
scupper the deal and it was studying America Movil's latest
    "We have never aimed to block the deal, but to get the two
parties to the negotiating table to come to a merger protocol in
a suitable way," a spokesman for the foundation said.
    KPN in a statement noted that America Movil "has not
improved or shown any willingness to improve the intended offer"
in spite of efforts made by the Dutch company.
    "From the outset KPN has stated to America Movil that, in
the view of the KPN Boards, the Intended Offer did not reflect
sufficient value for securing a positive recommendation from the
Boards," said KPN's statement.
    America Movil investors appeared to welcome the news, since
it prevented a planned outlay of at least 7.2 billion euros
($9.52 billion). America Movil's shares soared more than 6
percent immediately after the announcement before closing 3.16
percent higher at 14.01 pesos.
    The shares have been under pressure this year as investors
question the value of Slim's expensive European foray.
    Still, some analysts said they would not rule out a deal
happening at a later date.
    "The deal is unlikely to be dead. It just reached a
temporary dead end," Robin Bienenstock, senior analyst at
Sanford C Bernstein in London, said in an email, adding "AMX
shareholders celebrated too soon".
     The mobile operator is cash rich and its appetite for
acquisitions is not likely to be long-dented by the KPN setback,
several analysts and investors said.
    America Movil has a presence in 18 countries in the Americas
and more than 260 million wireless subscribers. It had turned to
Europe as it began reaching expansion limits in the Americas.
    The company is also facing a telecom reform effort in
Mexico, which accounts for almost half of America Movil's core
profit, that could shake its dominance in fixed and mobile phone
    The company is also hoping that one potential benefit of the
reform in Mexico is that it could open the way for America Movil
to offer pay-TV in Mexico, something that it is currently
blocked from doing.
    Asked in an interview last week if America Movil was
confident it will be able to enter the Mexican pay-TV market,
Elias said: "I think so, I think the law is very clear. The law
refers to specific obligations ... and that in fulfillment of
these obligations there will be a concession."

 (Additional reporting by Simon Gardner, Gabriel Stargardter and
Noe Torres in Mexico City; and Robert-Jan Bartunek in Brussels;
Editing by Leslie Adler and Bob Burgdorfer)