--America Movil secures more KPN stock as it moves into
Europe
--Company CFO reiterates intention of being "strategic,
long-term partner"
--Official says KPN objections were mostly over share price
(Updates with comments from company official)
By Anthony Harrup and Archibald Preuschat
America Movil SAB (AMX, AMX.MX), which is seeking to build a
significant presence in Europe with minority stakes in several
phone companies, said Thursday it has acquired additional shares of
Royal KPN NV (KPN.AE) and now owns 20.9% of the Dutch telephone
company.
The Mexican telecommunications company, controlled by
billionaire Carlos Slim, last month launched an offer to raise its
stake in KPN to about 28%, an offer that KPN management has
opposed, saying it undervalues the company. In addition to the
stake in KPN, America Movil has agreed to buy 21% of Austrian
concern Telekom Austria (TKA.VI TKAGY) from investor Ronny Pecik,
with plans to raise its stake to about 23%.
In a conference call with analysts, America Movil's Chief
Financial Officer Carlos Garcia Moreno reiterated that the
intention is to be a "strategic long-term partner" of the European
concerns as the Mexican company enters new markets, having
exhausted options for mergers and acquisitions in Latin America
where it is the biggest wireless service provider.
America Movil had 246 million wireless subscribers in 18
countries in the Americas at the end of March, including 20 million
in the U.S. where it operates as a virtual mobile-network operator.
Latin America will remain America Movil's core market and main
priority, Mr. Garcia Moreno said.
He said America Movil expects capital expenditures to be $9.5
billion this year, including investment in fourth-generation
services, and that it will remain around that level in coming
years.
Earlier Thursday, KPN put its Belgium operations up for sale and
reiterated its recommendation to shareholders not to accept a
partial takeover by America Movil.
The official announcement by KPN to divest itself of its Base
mobile-phone business in Belgium comes just a day after talks
between KPN and Telefonica SA (TEF) on a German market
consolidation collapsed. KPN intended to sell its German mobile
provider E-Plus to Telefonica to unlock shareholder value and to
prevent shareholders from accepting the offer from America Movil.
Telefonica competes with America Movil in Mexico and Latin
America.
Mr. Garcia Moreno declined to comment on KPN's strategy for
Germany, or suggest any other changes that could be made at the
European companies.
"We're just arriving," he said. "It would be very pretentious
for us to say we know everything and can tell them what to do."
The official attributed KPN's opposition to the bid mostly to
difference of opinion over the EUR8.00 per-share price offered for
the Dutch company stake, which, he added, could have led to other
objections. He stressed the price was 23% above the market level
prior to the offer.
Unlike KPN, Telekom Austria welcomed the arrival of America
Movil as a partner.
Mr. Garcia Moreno said the $4.9 billion that America Movil is
spending on the acquisitions, much of it with cash on hand, will
push its net debt up to $27.8 billion from $22.9 billion, but that
the company is being careful with its debt ratios in order to not
put its credit ratings at risk. The average life of the company's
debt is over 10 years, and average annual amortizations through
2020 are around $2.2 billion, he added.
America Movil had sales of around $49 billion in 2011.
Write to Anthony Harrup at anthony.harrup@dowjones.com and
Archibald Preuschat at archibald.preuschat@dowjones.com