America Movil and KPN cannot agree on valuation of the Dutch operator, with its management holding out for a higher price in the €7.2 billion takeover talks, according to Bloomberg.
KPN wants America Movil to raise its proposed €2.40 a share offer because the Dutch operator will benefit from a tax ruling relating to the sale of E-Plus in Germany, according to sources.
On the other hand, the Mexican group is arguing that the recent entry of Dutch cable operator Ziggo into the mobile market has depressed KPN’s valuation.
The differences on price are in addition to America Movil’s problems with the KPN Foundation, which has effectively put a block on the Mexican group’s bid. The foundation’s objections with the bid are not financial. It is charged with protecting the wider interests of stakeholders. To this end, America Movil has been running a charm offensive to convince the Dutch government and others about its intention.
In fact, America Movil said last week it would delay filing its formal €2.40 a share offer from September until October, a move which gives more time for negotiations between interested parties.
For its part, the foundation announced last week that it has appointed Rabobank as its financial adviser, alongside Rothschild as co-adviser.
And now KPN’s management is holding out for a higher price. “With KPN looking for a raised bid of €2.65 a share rather than something closer to €3, this keeps it still within reach for America Movil,” said Usman Ghazi, an analyst at Berenberg Bank. “America Movil staying at €2.4 could be an attempt to drive expectations down before the actual tender offer.”
Dutch tax authorities are allowing KPN to take a tax loss of €3.7 billion on the sale of German unit E-Plus to Telefonica, the company said on 16 September. That decision means less tax on KPN’s profits from next year. KPN shareholders are scheduled to vote on the E-Plus deal tomorrow (2 October).