RPT-UPDATE 2-KPN finance head quits with America Movil bid in limbo

Tue Sep 10, 2013 3:05am EDT

By Philip Blenkinsop

BRUSSELS, Sept 9 (Reuters) - KPN's chief financial officer quit unexpectedly on Monday, leaving the Dutch telecoms group without a key executive as it negotiates with Mexico's America Movil, which is proposing a 7.2 billion euro ($9.5 billion) takeover.

Eric Hageman, 43, was just one year into the job. KPN said he resigned due to personal circumstances, unrelated to working relationships or the company's present situation, and added it would make a further announcement regarding the CFO role "as soon as possible."

The timing could not have been worse for KPN, some analysts said, given America Movil's offer to buy out the shares it does not already own in the company, as it seeks to expand its business outside its core market of Latin America. The Mexican telecoms company has not yet made public a formal offer document.

One Dutch analyst who covers KPN, who asked not to be named because the issue was sensitive, said he thought the fact KPN had not announced an interim CFO suggested Hageman's resignation had caught them by surprise too.

"It's bad timing. They need a strong CFO in the current negotiations and the whole process with America Movil," he said, adding Hageman had met with investors as recently as last week.

Hageman was appointed chief financial officer and a member of the management board in September 2012. He had been interim CFO since January 2012 when his predecessor, Carla Smits-Nusteling, suddenly quit citing her objections over internal governance.

The Dutch Shareholders' Association, known as VEB, expressed its concerns on Monday about a "brain drain" at KPN over the past two years and noted Hageman's departure left KPN chief executive Eelco Blok on his own in the middle of a hostile takeover.

KPN shares were little moved by the news, closing up one percent at 2.193 euros, still well below America Movil's proposed offer price of 2.40 euros.

Emmanuel Carlier, analyst at ING, said KPN's statement had to be taken at face value, adding: "If you look at the share price I assume the market believes this is the case."

KPN said in its statement that Hageman had made an important contribution to the raising of capital, notably a 3 billion euro ($3.95 billion) rights issue, in 2013 and the intended sale of German mobile unit E-Plus to Telefonica.

The statement made no mention of Mexican billionaire Carlos Slim's company America Movil, which wants to buy the shares in KPN it does not already own.

America Movil owned nearly 30 percent of the Dutch group until a foundation tasked with protecting the interests of KPN exercised an option to give itself about 50 percent of KPN's voting stock, diluting America Movil's stake.

America Movil has said since that it has no intention of raising its bid.