Telefonica mulls KPN approach - paper

AMSTERDAM, April 22 (Reuters) - Spanish telecoms group Telefonica (TEF.MC) is mulling a bid for smaller Dutch rival KPN (KPN.AS), the Financial Times Deutschland (FTD) newspaper reported.

A Telefonica bid for KPN is a perennial rumour, and the two companies last denied in January that they were in merger talks.

But the FTD said in a preview to its Wednesday edition that the background for the Spanish group taking a closer look at KPN again -- the two firms called off a planned merger in 2000 -- was France Telecom's (FTE.PA) interest in Nordic group TeliaSonera (TLSN.ST).

A France Telecom move on TeliaSonera would be the third recent tie-up between former monopoly operators in Europe following Telefonica's purchase of an indirect stake in Telecom Italia (TLIT.MI) and the investment of Deutsche Telekom (DTEGn.DE) in Greek operator OTE (OTEr.AT).

Some analysts, while questioning the logic of such big cross-border deals, have argued that carriers might feel under pressure to make a move because acquisition targets in Europe become fewer and they want to be hunters and not prey.

The FTD cited a Telefonica insider as saying Telefonica had been mulling its strategic options and had begun crunching numbers and searching for synergies with KPN. The two companies are not talking and Telefonica had not drawn up an offer, the paper said.

Telefonica and KPN compete in Germany, where KPN unit E-Plus is the number-three mobile operator and Telefonica's O2 is number four.

Telefonica is the largest telecoms group in the Spanish-speaking world, and with a market capitalisation of about 89 billion euros second in Europe after Vodafone Group Plc (VOD.L). KPN has a market capitalisation of about 22 billion euros and 12 billion in debt. (Reporting by Niclas Mika; Editing by Braden Reddall)