* America Movil CEO tells magazine no hostile move planned
* Says capital hike very likely, America Movil to take part
* Telekom Austria shares fall 1.9 percent
(Adds no comment from America Movil, details on Telekom Austria
By Georgina Prodhan
VIENNA, Nov 14 America Movil does not
plan a hostile takeover bid for Telekom Austria
following its failed attempt to buy Dutch company KPN,
its chief executive said.
There has been speculation in recent months that the Mexican
Telecommunications group controlled by billionaire Carlos Slim
might try to take over Telekom Austria, which it already owns
But CEO Daniel Hajj said America Movil had not acquired its
stake a year ago in order to mount a takeover and saw itself as
a stable partner of fellow large shareholder Austria.
"You can expect many things from us but nothing hostile,"
Hajj told News magazine in an interview published on Thursday.
"We choose our common path with our partners in Austria."
America Movil owns 23 percent of Telekom Austria, the Alpine
country's largest carrier which is also active in central and
eastern Europe, and the Austrian government owns 28 percent.
Slim's family holds a further 3 percent.
Hajj said he saw a capital increase by Telekom Austria as
"very likely" after an unexpectedly expensive Austrian frequency
auction which will cost the operator 1.03 billion euros ($1.38
billion), about 38 percent of its market value.
A person with knowledge of the matter later told Reuters
Telekom Austria is planning a new bond with a volume of roughly
500 million to 750 million euros ($670 million to $1 billion),
likely in the next two to three weeks.
The Austrian firm on Thursday reported declining quarterly
earnings and revenues as it spends heavily to keep premium
customers in Austria and faces economic weakness abroad,
highlighting its limited ability to finance the auction alone.
When asked whether America Movil would participate in a
capital increase, Hajj - Slim's son-in-law - said it would
remain a "stable partner".
Hajj did not say whether America Movil would maintain or
raise its stake in any capital hike, and when asked about the
matter, the company declined to comment.
America Movil spooked investors last month with a lack of
clarity over its plans in Europe, where its investments have
driven up debt and contributed to financial expenses that almost
halved its third-quarter profit.
The company gave up its 7.2 billion-euro plan to buy the
whole of KPN after a foundation set up to protect KPN
shareholders' interests moved against it.
At Telekom Austria, a capital increase widely expected to
take place after approval from the company's shareholder meeting
next May would be an opportunity for America Movil to increase
its stake without provoking political opposition.
The Austrian government, facing a $25 billion fiscal gap due
to costly bank bailouts, is unlikely to be able to afford to
keep pace, though it has said it aims to keep at least 25
percent, enough to influence big decisions.
Telekom Austria shares, which have been buoyed by America
Movil takeover speculation, were down 1.9 percent to 6.01 euros
by 1048 GMT, the worst performers in the European telecoms index
, which was up 0.7 percent.
The company's third-quarter core earnings fell 13 percent,
hit by higher expenses for handset subsidies and personnel
issues in Austria, and a drop in roaming revenues from Croatia
after the Balkan country joined the European Union on July 1.
Earnings before interest, tax, depreciation and amortisation
(EBITDA) of 358 million euros and sales that fell 6 percent to
1.04 billion euros were broadly in line with expectations.
The company's three biggest markets - Austria, Bulgaria and
Croatia - all had a tough quarter for which a better performance
in Belarus and other markets could not compensate.
Telekom Austria said it had saved 113 million euros in the
first nine months of the year. It gave no earnings forecast but
reiterated it expected full-year revenues of around 4.1 billion
euros, down from 4.3 billion in 2012.
It said it still planned a dividend of 0.05 euros per share
for 2013 and said capital spending should be between 650 million
and 700 million euros excluding costs for the Austrian auction,
trimming its earlier plan to spend 700 million euros.
"This was expected to be a tough quarter. Results overall
are decent, though the market may be concerned by the worsening
trends in Austrian fixed, an asset viewed as relatively
resilient," Citi telecoms analysts wrote in a note.
In Austria, the company managed to hold its total number of
fixed-line subscribers steady thanks to additional broadband
customers but average revenue per fixed line fell 4 percent to
30.9 euros as time spent on voice calls continued to fall.
Fixed-line customers, who spend more than mobile customers,
are a key competitive advantage Telekom Austria has in its
domestic market over its wireless-only rivals, T-Mobile Austria
and Hutchison Whampoa's H3G.
($1 = 0.7460 euros)
(Additional reporting by Elinor Comlay in Mexico City; Editing
by Michael Shields, Pravin Char and Alden Bentley)