* Austrian state now owns 28 pct, America Movil 26.8 pct
By Anjuli Davies, Sophie Sassard and Georgina Prodhan
LONDON/VIENNA, Jan 30 Mexican billionaire Carlos
Slim's America Movil is expected to stay ahead of any
transatlantic rush into European telecoms markets this year with
a bid for majority control of Telekom Austria, bankers
and industry sources say.
Hopes of more consolidation and with it improving margins in
European telecoms markets have already boosted share prices in
the last year.
While AT&T has just ruled out bidding for Vodafone
in the next six months, analysts believe the U.S. group
still sees potential in Europe's growing demand for mobile
broadband services at a time when competition is heating up in
its home market.
But it was Slim who spotted Europe first, making his
landfall with the acquisition of stakes in Dutch group KPN
and Telekom Austria in 2012 and spending 4 billion
euros ($5.5 billion) in the process, only to see the value of
his stakes fall and a subsequent attempt to take over KPN
That leaves his sights set on Telekom Austria, and the
formation last month of a new government in the Alpine republic
should open the way for Slim to start negotiating with the new
administration about increasing his stake from about 27 percent,
bankers and industry insiders say.
Austria's government owns 28 percent of Telekom Austria via
a state holding company, OIAG.
"I expect Slim to make an offer for the majority of the
company sooner or later," said one source familiar with the
matter. "It could be in two weeks or six months."
Slim, keen not to suffer another rejection in Europe, wants
to reach agreement first with the Austrian government to secure
The two sides have had contact but negotiations over a
specific deal were stymied by the Austrian elections in
September last year and the subsequently lengthy process of
establishing a new coalition government.
A pending reform of the OIAG state holding company could,
however, still cause further delay.
Asked on Monday on the sidelines of a company event whether
ownership questions came up during Telekom Austria's frequent
discussions with the America Movil representatives on its board,
Chief Executive Hannes Ametsreiter told Reuters: "No. We just
Asked about Slim's intentions, he said: "I can't comment
because I don't have any information. It's their decision." He
added: "We have a very good relationship. It's been like that
from the start."
America Movil declined to comment.
One scenario for a possible deal would leave Slim with 51
percent of the share capital, the Austrian government with 25
percent instead of 28 percent currently, while the rest would
remain listed on the Vienna Stock Exchange, said bankers and an
A new share issue, which analysts expect could take place
after approval from Telekom Austria's shareholder meeting on May
28, would be an opportunity for America Movil to increase its
stake in a politically acceptable way.
At the company's current market valuation of 2.8 billion
euros and with a share capital increase expected to be in the
region of 1 billion euros, the rights issue alone would not be
sufficient to give Slim a majority.
But he could easily use such a share offer to raise his
stake to 30 percent, the threshold for having to make a
mandatory takeover offer.
Austria, trying to plug a $25 billion budget gap over the
next five years, may choose not to spend money on a rights issue
and allow its stake to be diluted, although the state has said
it is committed to maintaining a blocking minority of at least
Another idea being pitched is for the government and America
Movil to pool their stakes in a shareholders' pact, banking and
industry sources said.
Such a move would assure the Austrian government of having a
continuing say in the company, which is seen as being
strategically important for the country, and would prevent
America Movil and the OIAG from voting against each other on
America Movil's response to the idea has so far been
lukewarm, said a source close to Telekom Austria, while a
spokesman for OIAG declined to comment.
However, Movil's chief executive Daniel Hajj said in
November that no hostile takeover bid for Telekom Austria was
planned and he regarded America Movil as a stable partner for
the Austrian state.
America Movil bought most of its Telekom Austria stake from
investors Ronny Pecik and Naguib Sawiris in June 2012 for 9.50
euros a share, or more than $1 billion, when the shares were
trading at roughly 8.15 euros, and the rest on the market.
Analysts have been puzzling over why Slim is particularly
interested in Telekom Austria, which struggles in a fiercely
competitive market, other than that the the opportunity arose
with the sale of the stake held by Pecik and Sawiris.
However, the shares were trading down 1 percent at 6.29
euros on Wednesday and so far America Movil's European adventure
has failed to impress its own investors, as the investment to
date has increased Movil's debt and hit its profits.
Bankers and analysts have not ruled out a renewed bid for
KPN and some predict Slim could look to enter Italy again, where
he was blocked from investing in Telecom Italia in 2007.
A senior banker familiar with the telecoms sector said he
did not believe the tycoon's ambitions in Europe have
diminished. Slim still wants to reduce America Movil's
dependence on Mexico, where it earned two thirds of its
operating profit in 2012 and where regulatory changes are
threatening its position.
"In Mexico, the regulation is changing, politicians have
finally decided to act and the competition authorities are
following," he said, adding that America Movil's cash flow would
"Clearly, Europe is his bet for the future."