A foundation set up to protect the interests of KPN has exercised a call option to take 50 percent minus one of the voting rights in the Dutch operator. The Stichting Preferente Aandelen B said it decided to use the option to acquire preference shares in order to protect the interests of KPN and its stakeholders, including shareholders, employees, unions, customers and Dutch society. This gives it the largest stake in KPN, ahead of America Movil with just under 30 percent.
In a statement, the foundation said that KPN's interests were at risk from the unsolicited takeover bid announced by America Movil. It claimed that America Movil knowingly chose the hostile route in order to create unrest among stakeholders, without consulting KPN on a merger protocol or the offer document. America Movil denied this, saying it consulted KPN prior to announcing its bid intentions, and immediately after started talks on a new relationship agreement with the company. The latest talks with KPN management were scheduled for 30 August.
In a statement, America Movil said it's committed to going ahead with the bid. It emphasized that it's a long-term investor, and since first acquiring a stake in KPN over a year ago, has worked to help the company grow and benefit from its experience, including supporting the group's rights offering. It wants KPN to focus more on investment in infrastructure, to the benefit of its stakeholders, and help make the company more competitive. If the foundation continues to block the takeover, America Movil said it's prepared to withdraw the offer.
The Stichting has called for America Movil to start neogitations with KPN and the Dutch government. Earlier in the week the Mexican company already met with KPN's unions and a Dutch government minister. The unions appeared satisfied from the talks, while the minister also called it a "useful" conversation.
However KPN's works council later issued a statement calling on the government to block the takeover in the name of the public interest. Sjaak Slingerland, chairman of the works council, told news agency ANP he supported the foundation's move and expects America Movil will withdraw its bid. He said the preference shares can remain outstanding for up to two years, which gives the government time to pass protective legislation for KPN.
KPN confirmed the issue of 4.258 billion shares to the foundation, as prescribed in its statutes. It also noted the foundation's stated support for the sale of E-Plus, its intention to hold the preference shares temporarily and its plans to consider when to withdraw the shares. KPN has yet to issue an opinion on the America Movil offer.
The Dutch shareholder rights association VEB said it would not oppose the protective measure taken by the foundation. While in principle it does not support such constructions, the VEB said in this case such a move would help calm the situation and provide time for all stakeholders to negotiate a better takeover offer.
The group wants America Movil to raise its offer and provide guarantees for the protection of minority shareholder rights. America Movil has said its offer will be conditional on acquiring only 50 percent of KPN's shares. The recently agreed higher price for E-Plus with Telefonica should add at least 10 cents to America Movil's offer KPN, the VEB said, and this should be the starting point for new negotiations. It added that it was clear that after more than a year of America Movil's involvement in the Dutch company, KPN's management had completely lost control of the group.
