May 8, 2012 / 3:10 AM / 7 years ago

Slim's America Movil eyes bigger stake in Dutch peer KPN

MEXICO CITY (Reuters) - America Movil (AMXL.MX), the telecoms giant controlled by Mexican tycoon Carlos Slim, said on Monday it planned to acquire up to 28 percent of Dutch telecoms group KPN (KPN.AS) in its first big push into Europe, a deal that could be worth over $3 billion.

The logo of America Movil is seen in the company's new corporate offices in Mexico City. REUTERS/Henry Romero

America Movil, which said it already owns 4.8 percent of KPN’s stock, announced it would make a cash offer of 8 euros per share for the stake, a premium of roughly 23 percent to Monday’s closing share price for the Dutch company of some 6.48 euros.

“The investment in KPN represents the first significant investment by AMX (America Movil) in Europe,” said America Movil, a major cash cow for Slim, the world’s richest man.

To bring up its stake in KPN to 28 percent at the price it is offering would cost America Movil around 2.64 billion euros, ($3.45 billion) according to Reuters calculations.

America Movil, the biggest mobile operator in Latin America, did not say why it had set a 28 percent limit.

Dutch financial regulations stipulate that whoever acquires 30 percent of voting rights in a company must make a formal takeover bid for all the remaining shares.

A spokeswoman for America Movil did not immediately comment when asked about the bid. A spokeswoman for KPN said she could not immediately comment on America Movil’s announcement.

America Movil operates from the United States to Argentina, and over the past two years has looked at buying up telecoms operations in Serbia and Poland.

In a note to clients, brokerage Monex welcomed America Movil’s plans as potential good news.

“The company could get indirect experience of the European market and at the same time could acquire stakes in other companies in the region,” Monex said.

America Movil said it had informed Dutch financial regulators about its intentions and that it aimed to work “constructively” with KPN’s management on the bid. It aimed to complete its offer by the start of June.

In February, America Movil’s Chief Financial Officer Carlos Garcia Moreno said the company would not make further acquisitions in Latin America, but added that the telecoms giant was always on the lookout for acquisitions elsewhere.

KPN UNDER PRESSURE

KPN reported a 13 percent slump in core profits for the first quarter to 1.1 billion euros and pledged to speed up a program of cost cuts, including the loss of 4,000-5,000 jobs.

The telecoms group is under pressure in the Netherlands because its mobile customers increasingly use cheaper instant messaging such as Google Chat via the Internet instead of traditional text messages.

Unlike other European telecom groups, KPN was slow to adapt its pricing to compete with these services.

KPN used to charge separately for text messages instead of bundling them into packaged offers. As a result, customers had an incentive to switch to free internet alternatives.

America Movil controls about 70 percent of the Mexican cell phone market. The company said it had some 246 million mobile subscribers in the Americas as of the end of March.

Last week, America Movil’s Mexican mobile phone arm escaped a fine of nearly $1 billion dollars in exchange for agreeing to cut the charges it levies on mobile phone competitors.

The record fine had been imposed last year on Slim’s Telcel unit for charging unfair fees to competitors, and analysts said Slim got off lightly in the deal reached with Mexico’s Federal Competition Commission (Cofeco).

Reporting by Ioan Grillo, Tomas Sarmiento and Dave Graham; Editing by Richard Pullin

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