Mexican tycoon Carlos Slim stuck to his bid of 8 euros per share for a bigger stake in Dutch telecom firm KPN on Tuesday as his mobile phone giant America Movil hinted it was moving closer to a tie-up with its European target. America Movil, which has little left to snap up in Latin America, officially launched its offer and said it could pay some $3.25 billion for the 325 million KPN shares it wants to buy from current stockholders. The billionaire's cash cow is seeking its first stronghold in Europe and already holds a 4.8 percent stake in KPN. The official tender offer for Slim's bid, which was initially announced on May 7, seeks to boost America Movil's stake in the Dutch firm to no more than 27.7 percent. America Movil said in a filing that it had indicated to KPN on April 10 that it was considering the purchase of a significant stake in the Dutch firm and the two sides kept in contact, Reuters reported. On May 7, America Movil Chief Executive Office Daniel Hajj called his KPN counterpart Eelco Blok to inform him of the Mexican company's intention to launch its bid prior to the public announcement. The two companies held more meetings and video conferences after that, one as recently as May 25. "AMX and KPN exchanged information on potential cooperation, including ... in the areas of handset procurement, procurement of other hardware and iBasis," the filing said. A KPN company, iBasis is a carrier of international calls using voice over Internet protocol, according to its website. America Movil sent a letter to KPN last week repeating its aim to create a "long term relationship" between the two firms. Dutch financial regulations stipulate that anyone with 30 percent of voting rights in a company must make a formal takeover bid for all remaining shares. KPN shares, which have declined 35 percent in the past year, closed at 7.59 euros on Tuesday. The company, which has said Slim's offer undervalues its assets, has hired JP Morgan and Goldman Sachs to advise it on its strategic options. A KPN spokesman said that the group was studying the offer and did not have any further comment. America Movil's offer will be good from Wednesday through June 27 and could be extended, the company said. America Movil's Chief Financial Officer Carlos Garcia Moreno told a conference call the company had no plan to raise its offer for KPN. EXPANDING EMPIRE Slim has been looking to Europe to expand his communications empire. In addition to the bid for KPN, he also may be looking at Telekom Austria, according to media reports. America Movil operates from the United States to Argentina and over the past two years has looked at buying telecoms operations in Serbia and Poland. If successful, the deal could give America Movil seats on KPN's supervisory board. The Dutch telecom has been grappling with tough competition in its home market and a lack of scale in its foreign markets. The company, which has a 45 percent market share in the Netherlands in fixed line and mobile, has been hit by a string of problems under Blok, who has faced criticism from analysts, regulators, politicians and the public. Nick Brown, an analyst at Espirito Santo, echoing the opinion of someone close to the situation, said he wasn't surprised that America Movil had not raised its price. "They believe it's a reasonable offer at 24 percent premium to the KPN price before the announcement. There is nothing KPN can do to stop shareholders from accepting it, although it can try to convince them that selling off the Belgium and Germany businesses would be worth more."
