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Movil said Friday its offer for KPN will be dependent on receiving at least 50 percent of KPN's shares and there being "no competing transactions having been announced or made by any party." KPN, which once advised investors not to sell shares to Slim, said its board and managers would appraise the potential benefits of a Movil takeover "consistent with their fiduciary duties and their commitment to the continuity of KPN and the interests of all stakeholders." Movil built its stake in KPN over the past two years, in its first major foray outside Latin America. KPN's shares were worth more than $8 apiece when it began. KPN has run into financial trouble after the increasing use of smartphones began eating into margins in the Netherlands, where KPN has 40 percent of the mobile market. Customers with smartphones decided to ditch KPN's highly priced SMS text messaging service en masse for cheaper Internet-based services such as WhatsApp and Skype, and KPN's profits plunged. Then KPN paid more than it had expected to the Dutch government in an auction for fourth generation mobile licenses, loading its balance sheet with debt. In May, the company issued 3 billion euros worth of new shares in order to avoid a repeat of the near-insolvency it suffered in the early 2000s. Even after the share issue, KPN carried 9.5 billion euros in debt at the end of the second quarter.
It had recorded a second-quarter net profit of 107 million euros on sales of 2.94 billion euros.
[Associated
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