KPN Squirms, the Market Yawns, and Slim Gains

June 12th, 2012 by · Leave a Comment

According to reports, America Movil has increased its ownership stake in the Dutch incumbent KPN to 7.3% already. Carlos Slim is obviously putting his money where his mouth is, having acquired some 6M shares yesterday in the open market at a price of €7.80. That’s below the €8 price he recently offered to take a 27.7% stake in the company, which KPN gave the cold shoulder.

It must be tough to sit on the KPN board these days. They believe they’re worth more than this, and Carlos Slim obviously does too. But the markets? Not so much. The company’s recent revenue and profitability declines and the overall macroeconomic situation are a strong current for public opinion to swim against.

KPN has been looking at strategic alternatives to help bring out the company’s underlying value more quickly, including a sale of the German E-Plus business. One possibiltiy has it merging with Telefonica’s German business, which some think might draw the ire of regulators.  But thus far nothing has been helping, and even Slim’s openly declared interest has not brought the stock price up to his bid. Yesterday’s close stubbornly held its ground at €7.769.

The status quo obviously can’t stand for long.  But one wonders whether Carlos Slim and AM might raise the stakes and bid for the whole thing at some point.

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Categories: ILECs, PTTs · Mergers and Acquisitions

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