America Movil, which has made an offer to buy Netherlands service provider KPN, has encountered an obstacle. A KPN shareholder foundation set up to protect key national infrastructure when the former state-owned monopoly was being privatized now has exercised an option to buy almost half of KPN's voting shares.
America Movil, which already owns 29.8 percent of KPN, has been planning to make an offer of €2.40 ($3.18) a share to take control of the Dutch company. But the foundation considers the move a “hostile” takeover bid, and is resisting the buyout.
That has lead America Movil to say it will walk away from its €8.55 billion ($11.32 billion) takeover of KPN. That would undoubtedly cause KPN share prices to fall.
The KPN bid is part of America Movil’s effort to acquire stakes in the European mobile services market. But the effort to acquire all of KPN also is related to the proposed Telefonica purchase of KPN’s interest in E-Plus in Germany.
Telefonica has raised its offer by six percent to 8.55 billion euros to win America Movil's support for the deal. The move by America Movil into Europe by acquiring just under a 30-percent stake in KPN, the proposed Telefonica purchase of KPN and the America Movil proposed buyout of the rest of KPN are examples of an expected major consolidation wave in the European telecom market.
But as often happens, proposed deals face opposition from other bidders or shareholders. Also, Europe's competition regulators still would need to approve the Telefonica purchase of E-Plus or the America Movil purchase of the rest of KPN.
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