America Movil's proposed takeover of KPN is off.
In a statement on its website, the Mexican telco announced on Wednesday that it has withdrawn its, the same day it received approval from the Netherlands Authority for the Financial Markets (AFM) for the acquisition to go ahead.
Failed takeover bid
In August, America Movil — owned by multibillionaire Carlos Slim –, hoping to gain majority control of the company. The proposed acquisition caused a good deal of controversy, because earlier this year, America Movil had made a pact with KPN which effectively prevented the Mexican telco from increasing its stake in KPN beyond the 30 percent of the company it already owned.
In a successful attempt to derail the bid, KPN's independent foundation, Stichting Preferenteaandelen KPN B – whose purpose is to protect the company in case of an imminent hostile takeover – last monthin KPN, not only giving the foundation just over 50 percent of KPN and control of voting rights, but also effectively halving America Movil's stake in the company.
Once the foundation believes the threat of hostile takeover has passed, it will withdraw the share issue, meaning share distributions will return to their original values, but has not yet said when it expects to do so.
After these events, both KPN and America Movil remained silent with regard to the proposed takeover bid, although rumours surfaced that talks between the pair were continuing.
However, this week it was confirmed that America Movil has decided to revoke its €2.40 Euro per share offer, a bid that was 60 eurocents short of what KPN had stated it expected for the company.
On its website, KPN published a statement by Jos Streppel, chairman of the supervisory board and Eelco Blok, CEO and chairman of the management board, acknowledging the withdrawal of the offer and explaining why it refused to accept the offer in its current form.
"We have conducted a thorough process with regard to the intended offer. Throughout this process we have weighed the interests of all our stakeholders on financial and non-financial matters. We have not been able to agree on an offer price, and other terms and conditions, which would reflect appropriate value and minority shareholder protection for selling control of KPN. We remain fully committed to serving our customers in the best possible way and creating value for shareholders," the statement read.
More to come?
Although the offer has officially been withdrawn, America Movil still has a 30 percent stake in KPN and, in its statement, did not announced any plans to sell that stake. As a result, although the company has revoked its takeover bid, the door remains over for it to revisit the option in future.