America Movil Moves to Cut KPN Stake With Convertible-Bond Sale

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America Movil SAB sold 3 billion euros ($3.3 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 securities, maturing in five years, were placed at a 45 percent premium to the volume weighted average price of KPN shares on Wednesday, America Movil said in a statement. The Mexican phone carrier can settle the bonds in KPN shares, cash or a combination of both. KPN traded 1.4 percent lower at 3.44 euros as of 16:23 p.m. in Amsterdam. America Movil added 0.3 percent in Mexico City.

America Movil holds 21.1 percent of KPN, according to company filings. The stake has a market value of 3 billion euros. Slim has been gradually decreasing his holding since he withdrew 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 principle he would like to part with it,” said Jos Versteeg, an analyst at Theodoor Gilissen Bankiers. “And now he’s doing that in a rather original way.”

Europe Setback

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.”

Slim 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 he paid dropped to about 54 Mexican pesos ($3.55), a Mexican regulatory filing from 2014 showed.

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