Telefonica Improves Offer for E-Plus

Telefónica Improves Offer for E-Plus

The Spanish telecommunications giant Telefónica on Monday improved its offer for E-Plus, the German unit of KPN, winning support from KPN’s biggest shareholder, América Móvil.

KPN, Telefónica and América Móvil said that Telefónica had agreed to pay the equivalent of 8.55 billion euros, or $11.46 billion, for E-Plus, up from an earlier offer of $10.8 billion.

América Móvil, which is controlled by the Mexican billionaire Carlos Slim Helú, also said it still planned to go ahead with its separate $9.6 billion bid in cash for the remaining shares in KPN that it does not already own. The Mexican company now owns 29.77 percent of KPN, a Dutch telecommunications group.

Under the terms of Telefónica’s improved offer, KPN will receive $6.7 billion in cash for E-Plus and will get a bigger stake in Telefónica’s German business â€" 20.5 percent, compared with the 17.6 percent previously agreed to. Telefónica will sign an option to buy back 2.9 percent of its subsidiary after a year, at a price of $682 million.

In a note to clients on Monday, Banco Sabadell, a Spanish bank, described Mr. Slim’s support as “positive news” that would reduce “the uncertainty for the operation following the takeover bid for KPN by América Móvil.”

Shares in Telefónica rose 0.9 percent at the opening of the Madrid stock exchange, while KPN shares were up 2.4 percent in Amsterdam.

Pedro Oliveira, an analyst at BPI, also said Mr. Slim’s support increased the odds of the deal getting past regulators.

“We continue to stress that the operation is subject to regulators’ approval and despite the support of América Móvil there are still risks for the operation and to the value of the operation,” he wrote in a note.

KPN has so far resisted Mr. Slim’s move to increase his control, and an independent foundation that has the power to block KPN’s takeover has expressed concern over the proposed bid.

In a statement on Monday, América Móvil said it believed that by acquiring a majority stake in KPN, both companies could benefit from greater operational cooperation and coordination “in a rapidly changing European environment.”

Antitrust experts have said that Telefònica was likely to persuade regulators to clear its bid for E-Plus by giving up some spectrum and easing the entry of new competitors, a move that could also trigger a phase of consolidation in Europe’s packed telecom sector.

Telecommunications operators have lobbied heavily in recent months for Brussels to take a softer line on mergers, arguing that Europe has too many operators laboring under heavy regulation that saps their ability to invest in networks.