America Movil Says KPN Benefits From Germany, Belgium Units

America Movil SAB (AMXL), which is offering 2.6 billion euros ($3.3 billion) to increase its stake in Royal KPN NV (KPN) to 27.7 percent, said the Dutch operator benefits from retaining mobile-phone assets in Germany and Belgium.

KPN has put its German E-Plus unit under review to defend itself after Mexico City-based America Movil last month began its unsolicited offer. KPN had also started reviewing the future of its Belgian mobile-phone unit BASE.

“We thought that this was a company, KPN, all of it, that had good potential for development,” America Movil Chief Financial Officer Carlos Garcia-Moreno said in a phone interview from Mexico. “One area was Germany but also Belgium, both have been growing well and still have a lot more to offer. It is much better when you can develop an asset before you go into any transaction.”

KPN, the former phone monopoly in the Netherlands and the largest operator in the country, has called America Movil’s offer of 8 euros a share “opportunistic.” KPN and Spain’s Telefonica SA (TEF) are considering ways to merge their German units, a move that would create the country’s top mobile-phone operator by customers, two people with knowledge of the matter said this month.

To be sure, if the company were to receive a very high offer for certain assets, then it should be accepted, Garcia- Moreno said. “There are offers one cannot refuse, but I think those things tend to be quite exceptional in life and it’s really more about creating value.”

Telekom Austria

America Movil owned 8.1 percent of KPN as of a June 13 filing. That was up from 4.8 percent when America Movil disclosed last month its offer to buy more shares.

The CFO also said America Movil, which agreed yesterday to buy a 21 percent stake in Telekom Austria AG (TKA) from investor Ronny Pecik, currently doesn’t plan further European investments beyond KPN and Telekom Austria.

“We are not looking at anything else, we have decided to limit ourselves to what we can do, given our credit ratings,” Garcia-Moreno said. “We want to hold onto our credit ratings and that imposes very clear, very explicit limitations in terms of how much we can lever up and we do not want to affect the distributions we make to our own shareholders as a consequence of this.”

Slim’s wireless company purchased 5 percent of Telekom Austria’s shares and will acquire 16 percent later this year after regulatory approval, according to a filing. America Movil paid about 9.50 euros a share, said a person with knowledge of the matter, asking not to be identified because the deal is private.

Eastern Europe

America Movil said the deal is part of its geographic diversification strategy and will provide an attractive presence in Central and Eastern Europe. Austria’s state assets agency OeIAG, which holds 28.4 percent and is Telekom Austria’s biggest shareholder, said it welcomes America Movil taking a stake. Telekom Austria Chief Executive Officer Hannes Ametsreiter said he appreciates Slim as a strategic and long-term investor who will contribute industry knowledge.

Telekom Austria, based in Vienna, has operations in Belarus, Bulgaria, Croatia, Liechtenstein, Macedonia, Serbia and Slovenia in addition to the carrier’s domestic network. The company had 20.3 million wireless subscribers and 2.6 million fixed lines at the end of March.

Telekom Austria rose 1.4 percent yesterday to 8.15 euros in Vienna while KPN gained 0.6 percent to 7.96 euros in Amsterdam. America Movil declined 0.2 percent to 16.77 pesos in Mexico City.

Garcia-Moreno said that while the company hadn’t held talks with the Austrian government, KPN should be as receptive as Telekom Austria.

“We have said almost exactly the same with Telekom Austria as we have said with KPN,” Garcia-Moreno said. “You have seen the reaction of the Austrian government and that I think stands in stark contrast to that which we heard from KPN. So if it’s the same offer, what’s the difference in perceptions?”

To contact the reporter on this story: Jonathan Browning in London at jbrowning9@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net