Dutch kpn considers selling e-plus

Dutch kpn considers selling e-plus

On friday, the company’s management announced in the hague that it would examine all strategic options for its subsidiary e-plus in order to disclose the values of its german operations. What exactly that could mean, however, was not said.

"We have carefully examined america movil’s offer and have come to the conclusion that it is not in the interest of the shareholders," explained KPN CEO eelco block. The declarations triggered new speculations. KPN wants to sell its successful german subsidiary to spain’s telefonica, media reports said, which the spanish telecom giant rejected. From other sources, it was reported that both companies wanted to merge their german mobile communications activities.

This in turn, in a market with only four suppliers, would call the antitrust authorities in bonn or brussel to the scene. Such a case would in any case entail a competitive review, says a cartel expert. The german federal network agency, which had to decide in such a case whether the companies had to return a UMTS license, which they had bought at auction almost twelve years ago for around 8 billion euros each, was also on board. "We’ve been looking into that," a spokesman said, but declined to elaborate.

But the spanish are anything but expansion-hungry at the moment. Against the backdrop of enormous debt, telefonica recently announced a stock market flotation of its german subsidiary. KPN and telefonica share a common interest: they want to prevent another provider from establishing itself in europe. Because the real goal of america movil’s planned increase in its stake in KPN is to gain access to the german mobile communications business, wrote the "financial times deutschland". E-plus is very successful with its multi-brand strategy and america movil can enter the german business at a favorable price.

A few days ago, the mexican company announced an increase in its stake in KPN from around 5 to 27.7 percent and offered 8 euros per share for it. It is largely controlled by carlos slim, one of the richest men in the world. The total value of the offer is said to be 3.4 billion US dollars. America movil deliberately stayed below the 30 percent threshold so as not to have to make a public offer to all outstanding shareholders, KPN criticized.

"We are convinced that america movil is not willing to pay a fair premium for the additional influence in KPN," block stressed. KPN management therefore recommends that its shareholders do not accept the offer. The mexican company’s intentions are unclear and america movil is also unwilling to commit to KPN through a shareholder pact.

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