Royal KPN NV (KPN)’s independent foundation, which has the power to defend the Dutch carrier from a takeover, said it’s concerned that Carlos Slim’s America Movil SAB (AMXL) isn’t being clear about its $9.6 billion offer.
“There is considerable uncertainty about America Movil’s intentions,” the group said yesterday in a statement. In particular, America Movil needs to tell KPN investors sooner whether it favors the sale of KPN’s German business E-Plus to Telefonica SA (TEF), the foundation said.
The foundation can invoke an option to acquire voting stock if its board sees a threat to KPN, though it said it’s not currently considering such a move. If it did, America Movil would need the support of every other KPN shareholder to gain majority control, since the Class B voting stock can’t exceed the total issue of ordinary shares, minus one share.
America Movil is offering 2.40 euros a share to boost its 30 percent stake in KPN to more than 50 percent. Slim, which also owns a stake in Telekom Austria AG (TKA), aims to use The Hague-based KPN to expand beyond Latin America, where America Movil is the biggest mobile-phone company.
KPN fell 2.3 percent to 2.28 euros at 9:07 a.m. in Amsterdam. The stock hasn’t traded above 2.4 euros since America Movil said Aug. 9 it would make an official takeover bid next month. America Movil added 0.2 percent to 13.21 pesos yesterday in Mexico City.
The foundation has existed since the Dutch government first sold shares in KPN in 1994. On its board are Chairman Jacques Schraven, Vice Chairman Pieter Bouw, Hans Zwarts, Jan Klaassen and Peter Wakkie. The group is charged with defending KPN “from the influences that may threaten the continuity, independence and identity” of the company, filings showed.
The filings say the foundation’s policy is to only exercise its voting rights for a limited period to give it time to determine its position on pivotal decisions for the company. Last year, America Movil’s 8 euro-per-share bid to increase its stake in KPN didn’t trigger an official statement from the foundation.
“Exercising the call option currently isn’t on the table,” Walter Samuels, a spokesman for the foundation, said in a phone interview. “But it’s good there’s awareness of the foundation’s right to exercise the option.”
Stefan Simons, a KPN spokesman, declined to comment, as did representatives for America Movil and Telefonica.
Slim’s offer came weeks after KPN agreed to a separate 8.1 billion-euro ($10.7 billion) deal to sell its German unit to Telefonica. Mexico City-based America Movil hasn’t decided on whether to support the Telefonica deal.
“Obviously, America Movil has the right to think about its position, but it has to provide KPN, its staff and its shareholders clarity in a timely fashion,” not just shortly before or during the investor vote on the Telefonica deal, Samuels said.
The foundation’s position may put pressure on Slim to raise his bid. Moody’s Investors Service, Standard & Poor’s and Fitch Ratings have already said they may lower America Movil’s debt rating depending on the outcome of the transaction.
America Movil has financing plans to complete the KPN offer without a credit-rating downgrade even if every shareholder accepts its offer, Chief Financial Officer Carlos Garcia-Moreno said this week in an interview.
Slim moved on KPN while seeking leverage to get a higher price for E-Plus or to block the deal, two people familiar with the billionaire’s plans said, asking not to be identified as the discussions are confidential. The next step may be renegotiating the terms with Telefonica, one of the people said.
“America Movil has the right to make an offer for KPN,” Samuels said. “But it has come to the foundation’s attention that the announcement of the bid hasn’t been made in collaboration with KPN. This is of extra concern to the foundation, as it has to safeguard KPN’s, its staff’s, shareholders’ and customers’ interests.”
To contact the reporter on this story: Martijn van der Starre in Amsterdam at email@example.com