Telefonica Says Not To Bid For Any Part Of KPN: Reports

KPN Q1 Profit Falls; Suspends Dividends For FY13, FY14

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6/1/2012 8:19 AM ET

Responding to media reports that Dutch telecom firm Royal KPN NV (KKPNY.PK, KKPNF.PK) and Spanish telecom company Telefonica SA (TEF: Quote,TDE.L) are considering ways to combine their German mobile-phone businesses, Telefonica reportedly said Friday it does not plan to bid for any part of KPN.

Earlier, Dutch public broadcaster NOS reported that both companies are evaluating a variety of options and a merger of Telefonica's O2 Germany unit and KPN's E-Plus business. Telefonica recently said it is planning an initial share sale for O2 Germany amid its attempts to cut its net debt of more than 57 billion euros.

KPN, which rejected an unsolicited partial offer from Mexican billionaire Carlos Slim's América Móvil (AMX, AMOV) terming its timing as opportunistic, early Friday said it is exploring strategic options for E-Plus to unlock value embedded in the German business.

KPN has been going through hard times amid difficult market conditions in the Netherlands. In December last year, the firm agreed to sell its French mobile unit KPN France to Bouygues Telecom, and in April, it said it is exploring strategic options for its mobile activities in Belgium. The firm has also initiated a Dutch cost reduction program that is expected to end by next year-end.

It was against this background that the Mexican telecommunications company announced on May 8 an offer of 8 euros per share in cash and stock for a 28 percent stake in KPN. On May 29, América Móvil launched this offer, stating it would acquire up to 325 million shares and thus boost its stake in KPN to 393.28 million shares. The Mexican firm already owns 4.8 percent of the Dutch firm.

In Amsterdam, KPN shares are currently trading at 7.71 euros, up 0.06 euros or 0.80 percent.

In Madrid, Telefonica shares are currently trading at 9.04 euros, up 0.11 euros or 1.20 percent on a volume of 20.15 million shares. In pre-market activity in the U.S., the shares are currently trading at $11.24, up $0.17 or 1.54 percent.

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by RTT Staff Writer

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