NEW YORK (TheStreet) - A foundation tasked with overseeing the well-being of Royal KPN NV said late Tuesday it was worried about the lack of information included in a ¤7.2 billion ($9.5 billion) approach from Mexican phone company América Móvil SAB de CV (AMX).
The foundation stopped short of saying it would try to halt the deal and noted it was "concerned" about the merger offer. It specifically cited the lack of information about América Móvil's feelings about The Hague, Netherlands-based KPN's proposed sale of its German division. Spain's Telefónica SA has agreed to buy KPN's E-Plus unit for ¤6.1 billion in stock and cash.
"The Foundation notes that there is considerable uncertainty about América Móvil's intentions ... regarding its position on the further strategic development of KPN, including KPN's intention to sell its German subsidiary E-Plus," it said.
The foundation is formally known as Stichting Preferente Aandelen B KPN, or Foundation Preference Shares B KPN, and has the right to force the company to issue it new shares equivalent to KPN's current share capital minus one share.It's tasked with protecting KPN's interests, and a spokesman said it was especially perturbed by the approach because it didn't have the company's blessing. América Móvil, controlled by Mexican billionaire Carlos Slim, has publicly said it will wait for more information from KPN's brass before commenting on the E-Plus sale. But news leaks suggest it may have actually unveiled the KPN offer to either squeeze more money out of Telefónica or halt the approach altogether. However, Telefónica's bid for E-Plus is already perilous. Competition and phone regulators in Germany have pledged to take a hard look at it, as it would remove one of four cellular companies in Europe's biggest economy. América Móvil and Telefónica compete directly in South America. The Madrid-based company has also foiled attempts by Slim and his Mexican provider to buy into Telecom Italia SpA and also tried to prevent it from increasing its KPN stake to 29.8% last year. Telefónica is part of a consortium that owns 22.4% of Italy's incumbent phone company. The renewed resistance comes just days after two ratings agencies said an acquisition of KPN by América Móvil could jeopardize the Mexican phone company's debt ratings. Written by Andrew Bulkeley in New York
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV