Billionaire Slim Said to Weigh Sale of Stake in Carrier KPN

  • KPN stake sale could attract phone companies, such as Orange
  • Slim's latest investments in Europe focusing on real estate

Carlos Slim’s America Movil SAB is considering the sale of its minority stake in Dutch phone company Royal KPN NV, less than three years after the Mexican billionaire’s failed takeover attempt, according to people with knowledge of the matter.

America Movil’s 21 percent stake, valued at about 3.2 billion euros ($3.6 billion) at Wednesday’s closing market price, could be attractive to other phone companies, including French carrier Orange SA, the people said, asking not to be identified because the deliberations are private. Slim hasn’t made a final decision about the timing or structure of a sale, the people said.

“The typical parties are Deutsche Telekom, Orange and Altice,” Ruben Devos, an analyst for KBC Group, said by phone. “Of those three, Orange may be the most likely.”

To buy a stake in KPN, Deutsche Telekom AG would first have to sell its T-Mobile Netherlands unit, Devos said. Altice NV, controlled by billionaire Patrick Drahi, may already have halted its European takeover spree to focus on costs, debt reduction and investments in its existing businesses, the analyst said. Deutsche Telekom earlier this year failed to sell its Dutch unit as offers fell short of expectations, according to people familiar with the process at the time.

While KPN doesn’t have a direct say about the stake sale, it’s trying to find investors that they would deem as supportive of the management and its current strategy, one of the people said. The Dutch firm has reached out to sovereign wealth funds and other potential long-term investors in Asia with experience in telecommunications that are unlikely to make a bid for the entire company, the person said.

KPN shares fell as much as 1.2 percent at 12:48 p.m. in Amsterdam on Thursday. Orange is not working on any particular plans with regards to KPN or the possible acquisition of a share in its capital, a spokesman said. Representatives for KPN and America Movil declined to comment.

The world’s fourth-richest man has been gradually decreasing his holding since he withdrew a 7.2 billion-euro bid for KPN in 2013. The deal’s breakdown was a setback for Slim’s plan to expand beyond Latin America by acquiring assets in Europe. In two sales last year, America Movil offered 3.75 billion euros of KPN bonds that can be converted into shares. The company also reclassified the stake as an asset that’s available for sale.

Slim may sell his stake at a premium to raise sufficient funds to compensate investors who bought exchangeable bonds, one of the people said.

Slim, 76, is now betting on a recovery in other sectors in Europe, such as real estate and infrastructure in Spain. He made a bid last month for Fomento de Construcciones & Contratas SA and property developer Realia Business SA.

Orange will turn its attention to potential transactions to expand in Europe, as well as the Middle East and Africa, after it failed to reach a deal to buy Bouygues SA’s phone business, Chief Executive Officer Stephane Richard said in an interview earlier this month. The deal’s collapse denied the French phone industry consolidation that would have eased competition.

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