AMÉRICA MÓVIL, S.A.B. DE C.V. 
By 
Spain's Telefonica made an $11 billion offer last month to buy KPN's crown jewel, Germany's E-Plus, disrupting America Movil's expensive - and on paper money-losing - foray into Europe.
America Movil and Telefonica together control about 60 percent of mobile phone business in Latin America. The Mexican firm's purchase of stakes in KPN and Telekom Austria brought their rivalry to Europe, and the battle there now looks set to rage for months to come.
European telecoms firms are mostly struggling with saturated markets, recession-hit consumers, tough regulation and expensive network upgrades, leading some to look at consolidation.
America Movil is still evaluating Telefonica's bid for E-Plus, which is backed by KPN's board. But people close to the matter have said Slim's company views the offer as too low and fraught with regulatory risks, fuelling speculation that it might try to block the deal or push for a higher price.
Telefonica said on Friday its offer still stands and is "definitive.
America Movil and Telefonica have been bitter rivals for years in Europe and the Americas, going after the same spectrum licenses and assets - most notably a battle for a stake in Telecom Italia in 2007 - a fight Telefonica won.
A Telekom Austria source said America Movil was likely to launch a bid for the rest of that company as well. Under Austrian law, the Mexican firm cannot bid below the 9.50 euros per share that sources said it paid investor Ronny Pecik for his stake last year.
Telekom Austria declined comment on the matter. Shares in the company closed up 8.7 percent at 5.726 euros in Vienna.
Shares in America Movil, Latin America's largest phone company, were down 6 percent on Friday on news of the KPN bid and the spectre of a potential rating downgrade if the transaction is funded with debt and skews its debt/EBITDA ratio which is a critical metric for ratings agencies.
A source at America Movil said they could not provide details about how they would finance the bid, saying much depended on the take-up of the offer.
"By declaring his intention to make an offer for all of KPN, Slim has in reality drawn a line in the sand that tells Telefonica: This deal (E-plus) is not good enough," a person familiar with the matter said.
Telefonica wants E-Plus in order to strengthen its challenge to market leaders Deutsche Telekom and Vodafone in Germany, Europe's biggest economy.
"It looks like Slim is speculating on how desperate Telefonica is to get its hands on E-Plus," said a German investor with shares in KPN, Telefonica and Telefonica Deutschland, speaking on condition of anonymity.
It was unclear whether America Movil's bid was the first step of real negotiations to take control of KPN, or a disruptive move aimed at making Telefonica pay more.
"It is not clear at this stage what Slim's intention is. But if you wanted to disrupt the E-Plus deal, there was not a better way to do it," said a person familiar with the situation.
Veronica Romo, a telecoms analyst at the MONEX banking and brokerage group in Mexico City, saw two major attractions for Slim - the prospect of a good deal and a chance to avoid tighter regulations in the region. A sweeping telecoms sector overhaul in Mexico hangs over Slim's dominant position in the market.
"He is looking for other markets where he can continue growing due to regulatory issues in Latin America, and Europe is an important market," Romo said.
Analysts said Telefonica, which has sizable debts, might struggle to pay much more for E-Plus, but they also questioned whether America Movil was offering enough to win over KPN's board and shareholders. They added that the Mexican firm's finances were also looking stretched.
Even if Slim secured 51 pct of KPN shares at the end of its tender offer, due to Dutch corporate governance rules he would need the backing of KPN's supervisory board to control the company.
"A 7 billion (euro) offer is a significant sum for (America Movil) and will significantly reduce their ability to do other M&A," said Espirito Santo analyst Will Draper.
VALUATION
America Movil said on Friday it would bid 2.4 euros ($3.21) per share in cash for the rest of KPN. That is about 35 percent above the average closing price of KPN's shares for the last 30 trading days, but well under the 8 euros per share it paid in May 2012 when it started building its KPN stake.
The offer values the whole of KPN at 10.2 billion euros, compared with the 8.1 billion euros that Telefonica has bid in cash and shares for just E-Plus.
KPN shares rose 16 percent to close at 2.320 euros, while Telefonica shares ended flat at around 10.960 euros.
"The premium is 20 percent to the share price so obviously very good news from a KPN perspective," said Mark Benbow, a fund manager in the global equities team at UK based Scottish Widows Investment Partnership, which has shares in KPN.
KPN said it was considering America Movil's offer and would look at all options open to it. KPN shareholders are due to vote on Telefonica's bid for E-Plus in the coming weeks.
A second person familiar with the situation said KPN shareholders could be attracted to America Movil's offer because it was all cash and did not have the regulatory and integration risks associated with Telefonica's offer for E-Plus.
ING analyst Emmanuel Carlier said America Movil's offer seemed fairly priced, equating to an enterprise value (debt plus equity) of 4.9 times KPN's forecast core profit.
However, that is much less than the multiple of about 9 offered by Telefonica for just E-Plus. The Spanish firm expects hefty synergies from merging the German business with its existing operations in that country.
"I think Slim has to increase his offer in order to get people tendering their shares," said a second KPN shareholder, also speaking on condition of anonymity.
America Movil said it had invited KPN's supervisory and management boards to meet "as soon as possible."
The 160-year-old former Dutch telecoms monopoly has the option to block unwanted bids by handing preference stock to its "Stichting," or foundation.
KPN has been struggling to reverse a decline in revenues and profit in the face of stiff competition at home, where it still has a market share of about 45 percent in fixed-line and mobile telephony. The firm, which also has operations in Belgium, was slow to respond as consumers switched to free or cheaper ways of sending mobile phone messages, according to analysts.
Deutsche Bank is advising America Movil. Goldman Sachs and JPMorgan have advised KPN in recent deals.
($1 = 0.7471 euros)
(Additional reporting by Sara Webb in Amsterdam, Ben Deighton in Brussels and Harro ten Wolde in Frankfurt, Sophie Sassard and Christopher Vellacott in London, Clare Kane in Madrid, Angelika Gruber in Vienna and Gabriel Stargardter in Mexico City; Editing by Mark Potter, Simon Gardner and Leslie Gevirtz)
By Alexandra Alper and Sophie Sassard
