KPN shares sell off after takeover falls apart (Update)

Oct 17, 2013 by Toby Sterling

Shares in Dutch telecoms company Royal KPN NV are falling after Mexican billionaire Carlos Slim followed through on a threat to walk away from a takeover bid.

In early Amsterdam trading Thursday, KPN shares were down 8.8 percent to 2.22 euros ($3.01), well below the 2.40-euro per-share offer promised by Slim's America Movil. But the sell-off was not the bloodbath some investors had feared: shares were well below 2 euros when Slim began his approach in July.

The KPN Foundation, an independent body that oversees the company's interests, had branded Slim's offer—of 7.2 billion euros ($9.8 billion) for the 70 percent stake he didn't already own—as hostile. It blocked it by issuing new shares and told him to negotiate.

Movil said Wednesday KPN's management demanded a higher bid as a prerequisite to talks.

At a press conference Thursday, KPN CEO Eelco Blok confirmed that, saying Movil was trying to "buy a front-row seat for a dime."

KPN's shares have lost more than 70 percent of their value since Blok took the top job at the Netherland's largest telecommunications company in 2011. Customers with smartphones have been ditching KPN for cheaper Internet-based communications services such as WhatsApp and Skype.

KPN responded by hiking its prices for mobile Internet access, but was still forced to issue new shares this year to shore up its balance sheet. This month it also sold its German division, E-Plus, for around $11.4 billion, to Telefonica SA of Spain.

Blok had initially agreed to sell E-Plus for around $10.4 billion, but later negotiated a better deal under pressure from Movil.

"We have plenty of money because of the E-Plus sale, and for the moment we will continue independently," Blok said Thursday.

KPN is due to report third quarter earnings on Wednesday.

"KPN shareholders were better off with the Movil offer and they are now stuck with a company that's not worth more than around 2 euros per share," said Theodoor Gilissen analyst Jos Versteeg in a note.

He predicted Slim will eventually re-bid for KPN, possibly after buying additional shares below the 2.40 offer price.

Explore further: Alibaba surges in Wall Street debut (Update)

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Carlos Slim in $9.6BN bid for Dutch telecom KPN

Aug 09, 2013

America Movil SAB, owned by Mexican billionaire Carlos Slim, will launch a 7.2 billion euro ($9.6 billion) bid for the part of Dutch telecom company Royal KPN NV it doesn't already own, in a challenge to a rival offer for ...

Mexican mogul Slim expands empire in Europe

Jun 15, 2012

Mexican billionaire Carlos Slim on Friday moved to spread his telecoms empire into central and eastern Europe by raising his stake in Telekom Austria to 9.9 percent with the aim of obtaining 25.9 percent.

Netherlands raises $5 billion in frequency auction

Dec 14, 2012

(AP)—The Dutch government says it has raised €3.8 billion ($5 billion) in an auction of its 4G high speed mobile Internet frequencies. Winning bids were submitted by Royal KPN NV, Vodafone PLC, Deutsche Telekom AG and ...

KPN posts fourth quarter loss; to issue new shares

Feb 05, 2013

Royal KPN NV, the largest telecommunications company in the Netherlands, said Tuesday it plans to issue €4 billion ($5.4 billion) in new shares to regain financial stability after a bad year that finished with the company ...

Carlos Slim invests $40 mn in Shazam music app

Jul 08, 2013

Mexican telecoms tycoon Carlos Slim has acquired a 10.8 percent stake in Shazam, the British company behind a music recognition smartphone application that instantly identifies songs and artists.

Recommended for you

Alibaba makes Wall Street debut

Sep 19, 2014

Alibaba made its long-awaited Wall Street debut Friday on the heels of a record stock offering that opens the door to global expansion for the Chinese online retail giant.

Alibaba IPO to boost employee fortunes to $8 bn

Sep 19, 2014

Employees of Chinese e-commerce giant Alibaba will see their fortunes swell to nearly $8 billion as the company prepares a massive US stock offering that could be valued at $25 billion.

Alibaba mega IPO caps founder Jack Ma success tale

Sep 19, 2014

When Jack Ma founded Alibaba 15 years ago he insisted the e-commerce venture should see itself as competing against Silicon Valley, not other Chinese companies. That bold ambition from a time when China was ...

User comments : 0