KPN rebuilds bridges with América Móvil after takeover failure
KPN will re-establish commercial partnership agreements with Carlos Slim’s América Móvil that were torn up during the failed takeover attempt by the Mexican telecoms group last year.
The decision signals a thawing of the relationship between the two groups after América Móvil’s attempted acquisition of the Dutch telecoms incumbent was thwarted.
América Móvil withdrew its offer having failed to agree a price with KPN’s management, while a hostile move was blocked following the intervention of an independent foundation with rights to protect the Dutch group
América Móvil said on Wednesday it had cut its stake in KPN from 29.7 per cent to 27.1 per cent, pushing KPN shares down 4 per cent in morning trading. It is prevented from bidding again until April owing to the “lockout” following the end of the takeover discussions.
Eelco Bloc, chief executive of KPN, said that the two groups were on better terms now, although he admitted that the relationship had become more difficult after his management team rejected the Mexican group’s offer.
“After the withdrawal of América Móvil, the relationship was not really good but today we have again a good relationship. Not as good as it was before the offer, but the América Móvil board representatives are participating in a constructive manner,” he said.
“We were not able to come to an agreement with América Móvil – in the end it was only about price. They were not willing to move on price, not any cent. Looking at where share price is today, shareholders believe that KPN is worth more than €2.40.”
KPN will begin to reform the working groups that dissolved with the end of “relationship agreement” between the two sides. These will bring the business practices of two companies closer together again, starting with work on joint procurement of technology.
Mr Bloc said: “We have agreed to start first with procurement and see how it evolves to see if we should extend the relationship to a level where we were in August last year. It’s an OK relationship and we are starting to work together again.”
América Móvil has not made clear any further intentions, he added, although insisted that there was no regulatory blocking position if it did make a second attempt to acquire the former Dutch incumbent.
The first takeover bid was hindered by the blocking stake held by a foundation that exercised a poison pill to protect the Dutch telecoms on behalf of shareholders and employees.
“Neither the government nor the foundation are against an acquisition of KPN. The government have some clear requirements but if these are fulfilled then they would not do anything about an acquisition.”
He added that while he had been surprised about the timing of the foundation’s decision to call the option, “in hindsight their decision really helped get América Móvil round the table and start seriously discussing important subjects”.