* KPN foundation abstains from vote
* America Movil backs sale, board members not present
* No update on negotiations with America Movil
By Robert-Jan Bartunek and Sara Webb
THE HAGUE, Oct 2 Shareholders in Dutch telecoms
group KPN have approved the 8.55 billion euro ($11.6
billion) sale of its German unit E-Plus to Spanish rival
Telefonica, paving the way for KPN to step up
investment and resume dividend payments.
Combining the German units of KPN and Telefonica will create
the country's largest mobile operator by customers, giving
Telefonica more clout to compete with Vodafone and
The deal brings together two long-standing rivals in Latin
America. Carlos Slim's America Movil, the biggest
shareholder in KPN, approved the transaction once Telefonica
sweetened its offer in August, making it virtually certain that
the sale would be approved.
The Mexican billionaire's group has made a 7.2 billion euro
bid for KPN as it looks beyond its South American home base in
search of new opportunities in Europe.
KPN Chief Executive Eelco Blok told reporters he expected to
see more consolidation in the industry in Europe given the need
for funds for spectrum auctions and investment in new high-speed
data networks. He said the E-Plus sale was a "very, very
The Dutch group will be left with businesses in the
Netherlands and Belgium. It said it would use the proceeds of
the E-Plus sale to invest in its network and resume paying a
dividend in 2014 after skipping shareholder remuneration in
KPN, which will hold a 20.5 percent stake in the combination
of E-Plus and Telefonica Deutschland, said it expected
regulators to clear the deal by mid-2014.
KPN's shares closed 0.55 percent lower on Wednesday at 2.351
euros per share, below the 2.40 that America Movil is bidding
for the group.
The Dutch group has not welcomed America Movil's advances,
and an independent foundation tasked with protecting the
interests of investors and other stakeholders has moved to block
the America Movil bid by acquiring nearly 50 percent of the
Talks between the two parties were hampered by the
unexpected departure of KPN's finance chief Eric Hageman, just
one year after taking the job.
The foundation said previously that, apart from making sure
that the new owners made clear arrangements with employees,
America Movil should also make a fair offer for KPN.
Analysts have said that America Movil's offer of 2.40 euros
per share was not very generous, especially as KPN enjoyed a
925-million-euro tax break because of the sale, which equates to
0.22 euro per share.
Every 0.05 euro increase in the bid price would cost America
Movil about 150 million euros more.
The foundation abstained from voting at Wednesday's
extraordinary general meeting to approve the E-Plus deal.
KPN executives, questioned repeatedly during the meeting
about the status of the negotiations with America Movil, refused
"We are in talks with America Movil to get to a merger
protocol and how that will end is unclear," supervisory board
Chairman Jos Streppel told shareholders.
"We have fiduciary duties towards our shareholders and other
stakeholders according to Dutch law and hope that we can find a
balance to give a positive recommendation."
America Movil owned about 30 percent of the Dutch company
before the foundation stepped in and has two representatives on
However, neither of America Movil's board members were
present at the meeting on Wednesday because of a potential
conflict of interest, given that the two companies are still in
talks about the Mexican group's bid for KPN, Streppel said.