Sale by KPN's biggest shareholder makes way for Slim

AMSTERDAM/LONDON Tue Jun 26, 2012 5:38pm EDT

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AMSTERDAM/LONDON (Reuters) - Mexican billionaire Carlos Slim appeared to have outflanked management at KPN (KPN.AS) on Tuesday to take effective control of the Dutch telecoms group after KPN's only other major shareholder cut its stake by more than half.

U.S. investor Capital Research and Management reduced its stake to 6.79 percent of voting rights as of June 21 from 15.11 percent in January, according to a filing with Dutch markets regulator AFM.

The news comes on the eve of the expiry of the 8 euros-a-share offer by Slim's America Movil (AMXL.MX) to acquire 27.7 percent of KPN.

At just below the 30 percent threshold which obliges a bidder for a Dutch firm to buy the whole company, this would give Slim effective control because no more than half of KPN's shareholders ever appear at company meetings.

"Slim will want to have significant influence after the deal. With 27 percent he can control the investor meetings as not many people show up," said a senior telecoms sector banker.

His next step could be to call an extraordinary meeting of shareholders with a view to getting a role on KPN's supervisory board.

"He will want representation for one of his lieutenants," the banker said, adding that he believed the likeliest candidate would be America Movil's chief financial officer Carlos Garcia Moreno.

While KPN has urged shareholders not to take up America Movil's offer, analysts said the stake sale by Capital Research and Management meant that the Mexican group would reach its goal.

Seeking a foothold in Europe, America Movil said in a release on Tuesday that it has increased its stake in KPN to 23.43 percent.

"Slim looks smart. He has made his reputation buying distressed assets," said Tim Daniels, a telecoms analyst with Olivetree Securities.

"Nothing is different with KPN. He has completely outplayed Telefonica. He is not the world's richest man for nothing."

KPN's management has argued that it could produce better shareholder returns without Slim, possibly by selling its German mobile phone business E-Plus and Belgian unit BASE.

But efforts to sell E-Plus, possibly via a merger with Spanish group Telefonica's (TEF.MC) O2 Germany unit, quickly ground to a halt last week, when KPN said that a sale was not possible in the current market.

"They have had five years to sell E-Plus, but they chose to leave it until they had tanks parked on their lawn," Daniels said.

Capital Research and Management's UK office declined to comment on its stake reduction, while KPN would only say it had "taken notice" of the Capital sale.

Shares in KPN were 3.7 percent higher on Tuesday at 7.4980 euros, valuing the company at nearly 10.5 billion euros ($13 billion).

America Movil's offer expires at 1730 CET (1530 GMT) on Wednesday, June 27.

($1=0.8019 euros)

(With additional reporting by Robert-Jan Bartunek in Brussels; Editing by Erica Billingham, Greg Mahlich and Phil Berlowitz)

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