World's richest man makes €3.2bn offer for KPN stake

MEXICAN TELECOMS billionaire Carlos Slim has signalled his intention to expand into Europe with a €3.2 billion offer for a stake in KPN, the struggling Dutch telecoms operator.

América Móvil, the company controlled by Mr Slim, has offered €8 per share to increase its stake in KPN from 4.8 per cent to 28 per cent. The offer represents a premium of more than 23 per cent to KPN’s previous closing price.

América Móvil said it would seek to use KPN as a base for expansion in the European mobile market. “We think it gives us a good vantage point to look at this market in Europe,” said Carlos García Moreno, chief financial officer, adding the firm had run out of room to expand in Latin America.

Mr García Moreno cited “cultural affinities” as a reason to choose Europe rather than Asia, and said KPN’s position in the Netherlands, Germany and Belgium made it a safer bet than companies in peripheral European countries.

Mr Slim, ranked by Forbes as the world’s richest man, has built his fortune by taking over struggling companies and turning them around.

Frederic van Daele, an analyst at Kempen, said: “It looks to me like they are trying to buy themselves into relatively good European market positions with decent cash flows at a low price.

“I think there is something to the idea that they would like to have a minority stake, look over the shoulders of KPN management as to how the market works, learn something from that and maybe later see what they’re going to do.”

Shares in KPN closed up 17 per cent at €7.58. However, they have fallen in recent months – a year ago they were at more than €10 – as the firm has faced setbacks.

In December, Dutch competition authorities raided its headquarters in a price-fixing probe with two other mobile carriers, Vodafone and T-Mobile. In February, two million customers lost email access for days due to a hacking incident.

KPN said yesterday that América Móvil’s offer was too low. “KPN is of the opinion that €8 per ordinary KPN share substantially undervalues the company,” it said.

“KPN will seek further clarification as to América Móvil’s intentions.” – (Copyright The Financial Times Limited 2012)