Slim admits defeat in battle for KPN
Carlos Slim, the Mexican tycoon who controls América Móvil, has admitted defeat in a gruelling €7.2bn takeover battle for KPN after the intervention of an independent foundation linked to the Dutch telecoms group. The move will be a blow for Mr Slim, one of the world’s richest men, given the hefty losses already incurred on his European investments. Bernstein estimates that América Móvil is nursing a €900m loss on its investment in KPN, although shares in the group have traded higher since the bid. The Mexican billionaire has been forced into retreat by a poison pill defence that saw the body charged with protecting shareholder interests acquire a near 50 per cent stake in KPN. Mr Slim has already been rebuffed once before in Europe in an attempt to buy Telecom Italia in 2007 with AT&T of the US. Analysts have raised questions over América Móvil’s European strategy given similar stake building in Telekom Austria. Even so, one person familiar with the situation speculated that Mr Slim would easily find other opportunities to deploy his funds. "Carlos is a big boy, he will find a way to spend his money on situations that will get him a return and he has just decided KPN is not one." The failure of the deal highlights the difficulties in hostile foreign takeovers of European telecoms businesses, even as AT&T is again rumoured to be on the hunt for acquisitions. América Móvil said it "considers that the actions taken by the foundation are detrimental not only to all KPN shareholders, but also detrimental to clients, employees and other stakeholders of KPN who envisioned being part of a solid company with long-term vision". The company said it had "multiple conversations" with KPN’s board to reach an agreement over the terms of the deal, adding that the management had made these contingent on a higher offer price. One person familiar with the situation suggested that KPN wanted a price as high as €2.65. KPN’s Jos Streppel, chairman of the supervisory board, and Eelco Blok, chairman of the board of management and CEO, said: "We have not been able to agree on an offer price . . . which would reflect appropriate value and minority shareholder protection for selling control of KPN." Mr Slim will remain a minority shareholder in the group, even though those familiar with his views said the Mexican had misgivings about KPN’s management. One person described the situation as "outrageous". "Today we decided not to continue with the operation. We’ll have to decide [on keeping a minority stake]," said Aruro Elías Ayub, a spokesman for Mr Slim’s Carso conglomerate, told the Financial Times. "We could sell, we could keep it or we could increase it," he added. Mr Slim’s company had owned almost 30 per cent of KPN ahead of the foundation’s move in August. Shares in América Móvil rose 6 per cent following the announcement. America Movil will be prevented from bidding again for six months. Speculation is swirling that América Móvil is weighing a Latin American collaboration with AT&T.