America Movil buys into another European operator
Continues to fight with arch-rival Telefonica for major share in Dutch incumbent KPN
Published: 8 June, 2012
Latin American telco giant América Móvil continues to expand its international base, taking its second minority stake in a European operator in the space of a few weeks. It has acquired a 4.1% holding in Telekom Austria, following the purchase of a share in Dutch player KPN, though its attempts to increase the latter stake have been rebuffed.
The latest deal was conducted on the open market and added 10% to the Austrian incumbent's share price when it was announced. Oscar Von Hauske, head of fixed operations at América Móvil, told Reuters: "Telekom Austria is a company that we have been looking at for some time."
Ronny Pecik, a board member at the European firm, who last year acquired a stake of about 20%, plans to pool his stake with América Móvil's, according to local media reports. They claim that Pecik will sell his shareholding for almost €900m to a new company with the preliminary name of Amov. América Móvil will also transfer its stake to Amov, with the Mexican company then holding an 80% stake in Amov and Pecik's vehicle, RPR Privatstiftung, holding the rest. At that point, Amov would own 25% of Telekom Austria.
Meanwhile, KPN now has the Mexico-based giant as a shareholder too, but it has resisted its partner's bid to increase that stake, and has also spurned advances from América Móvil's greatest rival, Telefónica. It has rejected the Spanish operator's offer to acquire its German subsidiary E-Plus, claiming the price is too low. Telefónica aims to merge E-Plus with its own O2 Germany arm to create a more viable competitor for the country's leading cellcos, T-Mobile and Vodafone, even though E-Plus last year lost out on 800MHz digital dividend spectrum in the German auctions. A merger would result in Germany's largest mobile carrier by subscriber numbers.
However, the strategy may also be part of the wider battle with América Móvil, as the two majors duke it out for Latin American dominance. Sources told Bloomberg that Telefónica saw its rival's attempt to gain a significant shareholding in KPN as a "declaration of war" and proceeded with its own bid - despite its €57bn debt and major restructuring moves - as a countermove.
América Móvil has offered €8 per share in a partial tender offer, to raise its stake in KPN from its current 5% to almost 28% in a deal valued at €2.64bn. This has been rejected by KPN as undervaluing the company.
France Telecom's CEO Stephane Richard recently told the telco's annual shareholder meeting that América Móvil's bid for a substantial holding in KPN could spark a wider shake-up in the European market and reduce the number of operators, according to Reuters.
In a separate, but associated move, Telefónica has indicated that it could offer 20% of O2 Germany in an IPO.