Mexico’s America Movil continues building a stake in Dutch KPN

Mexican telecommunications group America Movil SAB de CV (NYSE:AMX) said it had bought further 3.7m shares of Royal KPN NV (AMS:KPN) in a transaction outside regular market trading and raised its stake in the Dutch telecommunications and ICT services provider to 8.12%.

The additional stock was bought at a price per share of EUR7.90 (USD9.95), AMX said.

The Mexican group is currently carrying out a EUR2.6bn partial offer aimed at increasing its KPN stake to 27.7%. AMX, which had 4.8% in KPN before launching the partial offer on 30 May, has said that the EUR8.00 a share bid will run until 27 June, unless extended.

AMX is using this deal to expand outside the Americas, as it views geographic diversification to be key to its growth after it had so far provided it with increased profit and cash flow stability as well as strong ratings, it has said.

KPN’s management and supervisory boards, however, deemed the offer opportunistic and undervaluing the company’s potential and had advised shareholders not to tender their stock to it.

Arguing against the offer, the boards said that it fails to reflect the value derived from KPN’s current transition of its Dutch business and its profitable growth in Germany and Belgium.

As an alternative, the Dutch group’s boards have proposed to start a strategic review of the company’s German business E-Plus in addition to the ongoing review of its Belgian mobile operations, as they expect such a move to unlock superior value for shareholders.

The deal is AMX’s largest investment in Europe so far, it has said, adding it would use own cash resources to finance a deal.

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