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Telefonica Lifts Offer to Buy E-Plus to EUR8.55 Billion

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Telefonica has raised its offer to buy Germany's E Plus from its Dutch owner, KPN, and in turn, KPN's largest shareholder has agreed to support the sale.

Under the new terms, while KPN is still receiving the same EUR5 billion in cash from the sale, it will also retain an increased stake of 20.5% in the merged O2/E-Plus network. The company had been due to be left with 17.6% of the merged network.

Furthermore, KPN provides a call option to Telefónica to acquire that heigher 2.9% stake in Telefónica Deutschland from KPN, only exercisable one year after completion of the transaction.

On the basis of these improved terms the total implied transaction valuation for E-Plus is now EUR 8.55 billion, as compared to EUR8.1 billion under the previous terms.

KPN said that it will use the majority of the EUR 5 billion cash proceeds to increase its financial flexibility and support the execution of its strategy in The Netherlands and Belgium. KPN also intends to recommence dividend payment to shareholders for 2014.

América Móvil, as main shareholder of KPN with a stake of 29.77%, has agreed to vote in favour of the new offer. América Móvil is still carrying out its own separate offer to buy KPN.

Shareholders are due to vote on the deal on the 2nd October.

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Tags: kpn  telefonica  america movil  e-plus  Germany