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America Movil Bid for KPN Hits Poison Pill Stumbling Block

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America Movil's bid to buy control of the Dutch KPN looks to have hit a stumbling block after a little known organisation exercised an option to buy almost half of KPN's voting shares.

America Movil said that its bid was conditional on buying at least half the shares in order to give it management control -- which is now looking increasingly unlikely.

The Board of Foundation Preference Shares B KPN, and organisation set up to "promote KPN's interests" said that it exercised an  option granted to it by KPN to buy class B preference shares, giving it close to 50% of the company's voting shares.

The foundation emphasized that it supports the sale of Germany's E-Plus, it will be holding the preference shares B only temporarily and from time to time it will be considering when the preference shares B should be redeemed.

The Foundation has a financial upper hand as it had to pay just 25% of the nominal value of the shares in order to be able to exercise their voting rights if the America Movil bid is put to a shareholder vote.

America Movil owns just under 30% of KPN.

The Foundation was set up when KPN was privatised by the government in 1994, but its action in this matter could be challenged in the courts as its share option, which was effectively a poison pill could be considered comparable to a government's Golden Share, which is illegal in Europe.

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Tags: kpn  america movil  Netherlands