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
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