* KPN foundation abstains from vote
* America Movil votes in favour of sale, board members not present
* No update on negotiations with America Movil (Adds board chairman quotes, details on America Movil)
By Robert-Jan Bartunek
THE HAGUE, Oct 2 (Reuters) - Shareholders in Dutch telecoms group KPN approved the sale of its German unit E-Plus to Spanish rival Telefonica for 8.55 billion euros ($11.6 billion), paving the way for it to step up investment and resume dividend payments.
Shareholder approval had been widely expected because KPN’s largest shareholder America Movil, which is bidding for the Dutch group, agreed to back the deal after Telefonica raised its purchase price and gave KPN a larger stake in the merged entity of E-Plus and Telefonica Deutschland.
The combination of KPN’s and Telefonica’s German units will create Germany’s largest mobile operator by customers, allowing Telefonica to see eye to eye with competitors Vodafone and T-Mobile.
A foundation tasked with protecting the interests of KPN’s employees, customers and shareholders - and which gained nearly half of the voting rights in August to block temporarily America Movil’s bid - abstained from voting at Wednesday’s extraordinary general meeting.
America Movil, the Mexican group owned by billionaire Carlos Slim, owned about 30 percent of the Dutch company before the foundation stepped in and has two representatives on KPN’s board.
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, Jos Streppel, chairman of KPN’s supervisory board, said.
“We are in talks with America Movil to get to a merger protocol and how that will end is unclear,” Streppel told shareholders, many of whom called on KPN to disclose more details about the state of the takeover talks.
“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.”
The foundation has previously said 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 euros tax break because of the sale which equates to 0.22 euros per share.
Every 0.05 euro increase in the bid price would cost America Movil about 150 million euros more.
KPN said it would use the proceeds of the sale of E-Plus to invest in its network and resume paying a dividend in 2014 after skipping shareholder remuneration in 2013.
KPN, which will hold a 20.5 percent stake in the combination of E-Plus and Telefonica Deutschland, said it expected regulators would clear the deal by mid 2014. ($1 = 0.7393 euros) (Reporting by Robert-Jan Bartunek, editing by Sara Webb and David Evans)