* Labour representatives boycott syndicate deal vote
* Unclear whether quorum reached
* Shares fall almost 5 percent
(Rewrites first paragraph, adds details on quorum, deal
deadline, background, shares)
By Georgina Prodhan and Angelika Gruber
VIENNA, April 23 Tycoon Carlos Slim stumbled in
his bid for control of Telekom Austria on Wednesday,
as a meeting designed to rubber-stamp a co-ownership deal with
the Austrian government was boycotted by labour representatives
unhappy with the proposal.
The deal is important for Slim because it could finally
allow him to begin consolidating the fruits of a European
adventure, begun in 2012 with initial investments of over $1
billion in Telekom Austria and $3.4 billion in Dutch group KPN
It was unclear if the meeting of the supervisory board of
Austrian state holding company OIAG had the necessary quorum of
seven to take a vote on the proposed deal, as at least half of
the 14 board members stayed away from the meeting, sources
familiar with the matter told Reuters.
Shares in Telekom Austria, which have been buoyed by
takeover speculation since Slim's America Movil first
acquired a large stake in the company two years ago, slumped
almost 5 percent as prospects faded of an imminent offer for the
rest of the company.
The agreement envisaged pooling the 28.4 percent held by the
OIAG with the 26.4 percent of America Movil in a syndicate where
both parties would have to vote in unison on major issues,
triggering a joint takeover offer.
The five labour representatives on the OIAG board boycotted
the meeting, three sources familiar with the matter told
Reuters. One said the chairman was also absent, and the offices
of two other board members said they were out of the country.
An OIAG spokesman declined to say how many board members
were in attendance on Wednesday or to confirm whether the
chairman, Peter Mitterbauer, was present.
A Reuters reporter saw at least four board members arriving
for the meeting, but neither Mitterbauer or any of the labour
representatives were among them. Mitterbauer's office declined
The meeting, which began at 0700 GMT, was expected to go on
into Wednesday evening, potentially giving one of the absent
board members time to make an appearance. A few board members
were seen by Reuters entering the meeting room after 1600 GMT.
A spokesman for America Movil said the company had no
comment for the time being.
Slim's original purchase of his Telekom Austria and KPN
stakes took advantage of market valuations seen as cheap at the
time, as he sought diversification outside Latin America where
regulators are looking askance at his dominant market share in
Telekom Austria was then battling fierce competition from
three other operators in the small Alpine nation, but a
consolidation of the market to three carriers was already in
view and has subsequently eased price rivalry somewhat.
Slim made an unsolicited offer for the rest of KPN last year
and was rebuffed, but the tycoon hoped to avoid a similar fate
in Austria, where he courted politicians with promises to
safeguard the Austrian headquarters and give the government veto
Following the syndicate agreement, Slim, with deeper pockets
than Austria, could then raise his stake either in the course of
a takeover or via a 1 billion euro ($1.4 billion) rights issue
of new stock, that a source with knowledge of the contract said
The OIAG has said its stake could fall to, but not below, 25
percent. It has declined to commit to keeping pace with Slim.
The OIAG labour representatives were unimpressed with a lack
of job guarantees, unclear strategy and absence of any promise
of a controlling role for Austria in the agreement text, the
source said. "This is no partnership of equals."
The influential head of the Vienna Chamber of Labour
released a statement condemning the syndicate contract, which he
said would bring only disadvantages for Austria and hand Slim a
majority on both the management and supervisory boards.
Telekom Austria's Chief Financial Officer Hans Tschuden had
his contract terminated three years early two weeks ago. No
reason was given for the decision.
Wednesday is the last day that the OIAG and Slim can agree
on the syndicate contract without getting special permission
from Austria's Takeover Commission or waiting another year.
Under Austrian stock market rules, the parties had 40
working days from Feb. 24, when America Movil said it could
start formal talks on a syndicate, to conclude an agreement.
($1 = 0.7248 Euros)
(Additional reporting by Derek Brooks, with Dave Graham in
Mexico City; Editing by Tom Pfeiffer and David Holmes)