MEXICO CITY (AP) — Mexican carrier America Movil said Wednesday it has abandoned plans to tender an offer for Dutch telecom Royal KPN NV.
America Movil's bid for KPN hit a major speed bump in late August when an independent group established to protect the company's interests, the KPN Foundation, branded the takeover attempt as hostile.
In a statement issued Wednesday, the Mexican firm said it has received approval from Dutch regulatory authorities to go ahead. But it said that because the foundation has a near-50 percent stake in KPN, America Movil decided not to go through with the offer of 2.4 euros per share, or a total of 7.2 billion euros.
Some shareholders felt that offer undervalued KPN.
America Movil (AMX) said it has proposed operating plans to KPN management, but the offer broke down over the pricing issue.
"As of the date of this announcement, AMX has not received comments on such proposals from KPN, who made any subsequent discussions contingent upon an increase of the offer price under the intended offer," according to the company statement.
Billionaire Carlos Slim controls America Movil, which already owns a 30 percent stake in KPN. The company had previously said it did not intend to raise its offer for KPN, and has threatened to walk away if the KPN Foundation persisted. Both America Movil and KPN shares were trading up slightly on Wednesday.
KPN's financial performance has deteriorated rapidly as customers with smartphones began abandoning its SMS offerings for cheaper Internet-based messaging services like WhatsApp.
KPN cut its dividends and wound up issuing 3 billion euros worth of new shares in April 2013. Shares eventually sank to a low of 1.37 euros each before recovering to around 2 euros before Slim announced plans for his bid.
Slim has argued that America Movil's involvement in KPN would benefit employees and customers, by helping the company return to growth and by investing in its infrastructure.