As expected, América Móvil announced its intention to make a voluntary cash tender offer for the outstanding ordinary shares of KPN at a price of $3.20 per share, which implies a premium of approximately 35.4% over the average closing price of KPN’s ordinary shares on Euronext Amsterdam for the last 30 trading days. The bid for the approximately 70% of Dutch telecoms group it does not already own is forecasted to reach $9.6 billion.
In a statement, América Móvil said that it is in compliance of its moves aimed at exploring opportunities to expand its operations to other regions outside the Americas in order to achieve geographical diversification and create attractive long-term returns for its shareholders. América Móvil noted “it aims to support to a greater extent KPN’s plans in a rapidly changing environment in Europe so that both companies benefit from their respective experiences in the sector.”
The move from Mexican billionaire Carlos Slim’s carrier came after América Móvil terminated its relationship agreement with KPN, which opened the way to increase its stake in the Dutch telecom group. It also challenges rival Telefónica to increase its business across Europe.
Last month, Telefónica agreed to buy KPN’s E-Plus for $6.64 billion in cash. As part of the deal, KPN will hold a 17.6% stake in Telefónica Deutschland after the transaction. It is expected that the transaction will reach $10.7 billion.
América Móvil stated that it is carefully evaluating the merits of a proposed E-Plus transaction and will make a final determination in relation to the exercise of its voting rights at the upcoming extraordinary general meeting of KPN.
“In our view, [América Móvil] is likely to vote no on the KPN EGM, at which shareholders will be asked to vote on the Telefónica E-Plus transaction. This could force [Telefónica] to either increase its bid on E-Plus or to bid on all of KPN,” Macquarie Capital noted in a research note. The firm also wrote that investors may question the merits of additional leverage for América Móvil to invest in Europe while its core Mexican operations are showing signs of a turnaround.
