B_B schreef op 10 mei 2012 01:00:
DEALTALK-KPN's options limited in face of Mexican approach
Wed May 9, 2012 4:13pm EDT
* America Movil makes tender offer for 28 percent of KPN
* KPN concerned about losing influence over its future
* America Movil casts itself as "friendly" but conflict
* Sale of German unit a possible defence but not simple
By Leila Abboud and Sophie Sassard
PARIS/LONDON, May 9 (Reuters) - Mexican tycoon Carlos Slim
looks set to succeed in using KPN as a stepping stone into
Europe unless the Dutch telecoms group can swiftly come up with
a shrewd plan to derail his bid, sources familiar with the
KPN said on Tuesday that the unsolicited tender
offer from America Movil, controlled by billionaire
Slim, to pay 8 euros per share for a 28 percent stake
undervalued its business. It hired Goldman Sachs and JP Morgan
to help it weigh its "strategic options."
KPN is concerned that Movil would gain too much power over
its strategy, especially a long-mooted sale of its German
business worth 8-10 billion euros, without offering enough of a
premium for the privilege, said a person close to the situation.
But since Slim's tender offer will be made in early June
directly to shareholders, many of whom have watched in dismay as
KPN's shares slid 35 percent in the past year, KPN's management
and board cannot just refuse it or hold out for a higher price.
The tender offer, which America Movil said it aimed to carry
out by early June, came in at roughly 24 percent above KPN's
share price before the announcement.
KPN has a few options from here, none of which are simple to
pull off, analysts and bankers say. It can try to negotiate a
higher valuation for its shares with America Movil or more
favourable terms that would protect its management independence
perhaps via a shareholder pact. It could also lobby its major
shareholders not to sell their shares to Movil.
One person familiar with the situation said KPN's best
chance to counter Slim's stake-building plan would be to do
something that would push its share price above 8 euros or
somehow invalidate the conditions attached to the tender offer.
KPN shares closed at 7.72 euros on Wednesday after jumping 17
percent on the Movil announcement.
For example, KPN could search for a buyer or a joint-venture
partner for its German business, E-Plus, which it could then
argue would deliver more upside to shareholders in the form of
buybacks or a special dividend than America Movil's offer, said
another person close to the situation.
"They could do something around E-Plus but they need to be
quick," the first person said.
Telefonica or Vodafone have long been seen
as good candidates to buy E-Plus since both would benefit from
boosting their presence in Europe's biggest market.
Whether Telefonica or Vodafone would be able to bid high
enough to tempt KPN now is far from certain since prior
negotiations over the third-place German player have always
foundered on price.
Telefonica is struggling with a heavy debt load and a weak
domestic market in Spain, so might not have the firepower to buy
now unless it cut its dividend or sold other assets, analysts
say. Vodafone is in a stronger financial position.
Slim's Movil would not likely want to sell KPN's German
business, sources said, given its attractive growth prospects
and role as a beachhead for Movil's European ambitions.
Guy Peddy, telecoms analyst at Macquarie Securities, said
that either way KPN needed to engage in talks with the
Slim-Movil camp to see what the new shareholder would support in
terms of strategy, investments and asset sales.
"KPN's strategic options are limited," said Peddy. "Selling
assets in Germany and Belgium sounds easy but you need buyers.
And Slim's offer has been the best thing for KPN's shares in the
past 18 months, so it's hard to see how they would go out to
their shareholders and argue against it."
Asked to comment on Wednesday, a KPN spokeswoman reiterated
that it was exploring all strategic options.
KPN cannot turn to the Dutch state for help, because it is
no longer a shareholder and is not expected to block the deal
due to the Netherlands' open economy. The government declined to
comment on the deal itself and labour unions are reserving
judgment until more is known about Movil's intentions.
For its part, America Movil has sought to portray itself as
a "friendly" long-term investor that saw promise in KPN and
would work with management to create value for shareholders.
"America Movil doesn't want to run or control KPN," said
another person close to the situation. "Carlos Slim and America
Movil believe that KPN's management is best placed to decide on
the strategy and would likely support it in the future too."
For America Movil -- which has already achieved huge scale
in Latin America -- the expansion into Europe would fill a
long-held aim of Carlos Slim, who once tried to buy Telecom
Italia before getting pipped to the deal by Telefonica.
Ultimately, if America Movil does go ahead with its tender
offer for shares in KPN, it will be up to investors - and not
KPN's management - to decide whether the price is attractive or
not and whether to sell their shares.
The question for KPN shareholders, and the company itself,
is whether the premium that America Movil is offering is worth
the influence that they risk losing over the future.
Capital Research and Management Company, which is KPN's
biggest shareholder with 15.1 percent has so far declined to
comment on America Movil's tender offer.
Other shareholders may view the Movil offer as a lifeline
for KPN, which faces increasingly tough competition and slumping
revenue, profits, and market share in its home market.
Robin Bienenstock, an analyst at Bernstein Research, said
KPN might just have to get used to having a new influential
shareholder. "If enough shareholders want to sell at this price,
then KPN will have to live with Carlos Slim," she said.www.reuters.com/article/2012/05/09/kp...