América Móvil lifts stake in KPN

América Móvil SAB de CV late Monday, June 11, stepped up the pressure on Royal KPN NV, revealing it had bought shares in the Dutch telecom on the market for a lower price than its hostile tender for a minority stake.

Mexico City's América Móvil said it paid €7.80 per share for 6 million shares, or €46.8 million ($58.5 million) in total, to increase its stake to 7.3% from 5%.

América Móvil, owned by Carlos Slim, the world's richest man, in April launched an unsolicited offer to increase its KPN stake to just under 28%. The company is offering €8 per share, or up to €2.66 billion but KPN has resisted the overtures and hired Goldman, Sachs & Co. and J.P. Morgan Chase & Co. to review alternatives to help fight the offer.

KPN's contemplations dovetail with a recently announced plan by Telefónica SA to sell shares in its German O2 operation. Telefónica is currently negotiating the purchase of Germany's E-Plus from KPN and would use the share sale to fund the deal without adding to its large debt pile, the Financial Times Deutschland reported Tuesday, echoing earlier reports. The providers are the No. 3 and No. 4 German mobile network operators, respectively. Telefónica earlier this month denied holding talks about buying E-Plus.

"Even if Telefónica is denying an approach, it still seems likely. América Móvil's offer at €8 a share is clearly too low," wrote UBS analyst Nick Lyall in a note. He has a buy rating on KPN shares.

KPN stock gained just €0.02 Tuesday to €7.79, below the mark at which América Móvil bought shares.

The biggest question in a defensive merger of E-Plus and O2 is whether German competition authorities would approve. U.S. regulators recently nixed plans for AT&T Inc. to buy Deutsche Telekom AG's T-Mobile USA Inc. And Vodafone Group plc called off an acquisition of Wind Hellas Telecommunications SA early this year because it was clear Greece's competition watchdog wouldn't allow a deal that would have left just two competitors.