China in auto power play
It might not shake up the industry just yet, but China's interest in Volvo and Saab is the start of something big in global autos, writes columnist Wei Gu. Commentary
KPN launches formal offer for Getronics
AMSTERDAM (Reuters) - Dutch telecoms group KPN (KPN.AS) launched its offer for Dutch IT services company Getronics GTN.AS, worth 1.2 billion euros ($1.66 billion) in debt and cash, on Tuesday, with the offer period ending on October 12.
KPN shares were up 3.8 percent at 11.86 euros at 10:00 a.m. EDT, the top performer of the European DJS telecoms stocks index .SXKP. Earlier they touched a 7-week high of 11.90 euros after broker Merrill Lynch upgraded its recommendation on the stock.
KPN, which announced on July 30 that it had agreed with the struggling information technology company to buy its shares for 6.25 euros per share, is trying to move from providing communications links to more value-added services in the business market. That values the equity of Getronics at 766 million euros.
The former Dutch telecoms monopoly is also spending an additional 415 million euros on buying back Getronics's outstanding convertible bonds maturing in 2008, 2010 and 2014 as well as preference shares, KPN said in a statement.
In total the deal is worth 1.18 billion euros.
Traders said Merrill Lynch upgraded KPN to "buy" from "neutral" with a price target of 14.25 euros per share.
"KPN is up on a Merrill Lynch upgrade. It's been put on their "focus list"," said asset manager Gert-Jan Geels from Eureffect.
Getronics, whose shares were up 0.65 percent to 6.19 euros, said that it would convene a shareholders meeting on October 2 to explain the KPN offer, which is backed by its management.
KPN said it already owns 30 percent of Getronics, bought on the open market after it announced the deal, and said that the offer would be declared unconditional once it receives acceptances for more than 80 percent of Getronics shares.
KPN said several hundred jobs would be cut in the deal and it expected to generate annual synergies of 50 million euros from 2009.
KPN also agreed a deal last month to buy the Belgian units of Versatel VERS.AS, which is majority-owned by Swedish telecoms operator Tele2 (TEL2b.ST), for about 95 million euros.
(Additional reporting by Alexandra Hudson)
