America Movil SAB is offering 2.25 billion euros ($2.5 billion) of bonds that can be converted into shares of Royal KPN NV, two years after billionaire Carlos Slim’s failed bid to take over the largest Dutch phone company.
The sale of bonds that mature in five years has a so-called upsize option of 250 million euros, and the exchange premium will be 40 percent to 45 percent more than a reference price to be set on Wednesday, America Movil said in a statement. KPN shares fell 3 percent to 3.38 euros at 10:15 a.m. in Amsterdam, valuing the company at 14.4 billion euros.
“AMX will have the option to redeem all, but not some only, of the bonds in certain circumstances, including from approximately 2.5 years after the issue date at their principal amount, together with accrued interest,” America Movil said in the statement.
America Movil holds 21.1 percent of KPN, according to the Mexican company’s most recent financial report. The stake had a market value of 3.1 billion euros as of Tuesday’s close. Slim has been gradually decreasing his holding since he was forced to withdraw a 7.2 billion-euro bid for the Dutch carrier in 2013 after talks broke down and KPN’s preference share foundation blocked the takeover attempt.
“He said many times that he is no longer interested in KPN, that it is no longer a strategic takeover but purely a stake, and that in principal he would like to part with it,” Jos Versteeg, an analyst for Theodoor Gilissen Bankiers said by phone. “And now he’s doing that in a rather original way.”
Slim initially offered 8 euros per share for KPN in May 2012. After his company took part in KPN’s share sale in 2013 the average price per acquired KPN share dropped to about 54 Mexican pesos ($3.55), a Mexican regulatory filing from 2014 shows.
Slim’s potential exit from KPN is a setback for his European expansion strategy. America Movil also owns a controlling stake in Telekom Austria AG, the Alpine country’s biggest carrier, which has businesses in countries such as Bulgaria, Croatia and Belarus.
America Movil is struggling to maintain growth in Mexico, where it serves 7 of 10 mobile phone users. The operator is instead relying on Brazil, Austria and the U.S. for expansion, as it deals with regulatory sanctions in Mexico that forced it to stop charging competitors to connect calls and eliminated domestic roaming charges.
“KPN takes note of the bonds launched by America Movil,” said Stefan Simons, a spokesman for KPN. “This is a capital markets transaction, in which KPN is not a direct party.”