By RTT News, October 16, 2013, 11:53:00 PM EDT
(RTTNews.com) - Mexican telecom giant America Movil S.A.B. De C.V. (AMX, AMOV), controlled by Mexican billionaire Carlos Slim, said Wednesday that it will not launch its planned $9.6 billion takeover offer for Dutch telecom group Koninklijke KPN N.V. (KKPNY.PK, KPN). The decision marks a setback for America Movil's efforts to expand into Europe. However, the company's shares gained more than 4 percent in the regular trading session.
America Movil said that the decision of the Stichting Preferente Aandelen B KPN, an independent foundation linked to KPN, to exercise a call option to take a stake of about 50 percent in the Dutch telecom group virtually blocked its own takeover bid.
"As of the date of this announcement, the Stichting Preferente Aandelen B KPN has a 50% minus one voting interest in the capital of KPN. In view thereof, AMX will not launch the Intended Offer and will not make the Offer Memorandum approved by the AFM publicly available in accordance with Section 10 paragraph 1 of the Takeover Decree," America Movil said in a statement.
America Movil noted that the Foundation's decision to exercise the option granted to it by KPN to purchase its class B preference shares obstructed its own bid, to the detriment of KPN shareholders who had planned to participate in its takeover offer.
America Movil noted that since the start of its takeover offer efforts in early August, it held multiple conversations with KPN in order to reach an integral agreement on matters such as its active role in KPN's management and on undertakings America Movil would assume following settlement of the intended offer. However, the company noted that that KPN made any subsequent discussions contingent upon an increase of the offer price.
America Movil, which currently holds a nearly 30 percent stake in KPN, has been that company's largest minority shareholder since June 2012. America Movil has been exploring opportunities to expand its operations to other regions outside the Americas and KPN represented its first such investment.
America Movil said in early August that it plans to make a voluntary tender offer of 2.40 euros per share in cash for the remaining 70 percent stake in KPN that it does not already own, for an estimated value of $9.6 billion.
Later in August, America Movil said that while it continued to be committed to its intended offer for KPN, it was prepared to withdraw the offer if the Foundation sought to prevent it. At that time, the company noted that the board of the Foundation exercised the option granted by KPN to purchase class B preference shares in the capital of KPN.
KPN had issued about 4.258 billion class B preference shares to the Foundation. The shareholding will represent 50 percent minus 1 vote of all issued and outstanding shares in the capital of KPN.
However, the Foundation has said its move was to safeguard the interests of KPN as well as its stakeholders, as America Movil announced its intention to make an offer for KPN shares without prior consultation with the company. The Foundation also said it supports KPN's sale of German mobile telecommunications business E-Plus to Telefonica Deutschland Holding AG, a unit of Spanish telecommunication group TelefÃ³nica S.A. (TEF, TDE.L).
In a separate statement Wednesday, KPN said that despite several key developments since America Movil's announcement of its intended offer, "America Movil has not improved or shown any willingness to improve the Intended Offer of EUR 2.40 per share."
Further, KPN said that despite its board's numerous discussions with America Movil, it was not able to obtain an acceptable proposal on the content firmness, duration and enforceability of America Movil's commitments to KPN's stakeholders.
AMX closed Wednesday's trading session at $21.75, up $0.88 or 4.22 percent on a volume of 20.76 million shares.
KPN shares closed Wednesday's trading in Amsterdam at 2.43 euros, up 0.01 euros or 0.54 percent on a volume of 14.68 million shares.
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