TELEFÓNICA, S.A. 
By 
Slim's America Movil already holds nearly 30 percent of KPN, but the surprise move by the KPN foundation against his firm's offer underlines the difficulty the tycoon faces in extending his telecoms empire outside of Latin America.
Set up to protect key national infrastructure when the former state monopoly was being privatized, the KPN foundation said it had exercised an option to buy certain shares that will give it almost 50 percent of KPN's voting stock.
"The foundation has intervened in this way in order to safeguard the interests of KPN and its stakeholders, including shareholders, employees, customers, trade unions and Dutch society more generally," it said in a statement.
The foundation argued that these interests were at risk because America Movil had not consulted with KPN before announcing its intention to make a takeover offer.
A spokeswoman for America Movil declined to comment.
Already the biggest player in Latin America, Slim is looking for fresh investment opportunities to help turn around slowing profits at America Movil, as well as regulatory efforts to cut him down to size in Mexico, where he has long been dominant.
America Movil, which acquired its large stake in KPN last year, earlier this month said it intended to bid for the rest of the company, offering 2.40 euros a share in cash.
Slim, who began 2013 as the world's richest man, could also try to fight the KPN foundation's move in court.
"We wouldn't be surprised to see AMX go to (the European Union) to challenge the authority and legality of the foundation on the back of this move," said Imari Love, analyst at Morningstar. "It's clear the foundation is trying to keep KPN Dutch-owned by using this poison pill, which, in effect, has the same impact of golden shares, which are illegal."
Jorge Negrete, head of telecom think tank Mediatelecom in Mexico City, said Slim might well be feeling aggrieved.
"This isn't about business, this seems to me to be clearly about protecting the European market," he said.
FOUNDATIONS
America Movil also has the option of sitting down to offer a higher price for the rest of KPN it does not already own.
The foundation itself called for more talks to be held.
"The foundation believes that America Movil should, in accordance with the rules and what is common practice in the Netherlands, open negotiations with KPN's Board of Management and the Dutch government as soon as possible," it said.
Still, KPN shares closed down 0.65 percent at 2.28 euros suggesting that - at least before the foundation's announcement - not all investors believe a higher offer would be justified.
Foundations such as KPN's have been used to try and gain an advantage in high-profile corporate battles, including luxury goods maker LVMH's failed hostile takeover of Gucci in 1999 and hedge funds' efforts to replace the board and break up chip equipment maker ASM International in 2008.
Shares of America Movil, initially rose on the foundation's announcement, reflecting the unpopularity of the KPN investment. The purchase has so far resulted in billions of pesos in paper losses for America Movil, Slim's flagship company.
TELEFONICA FIGHT
A number of analysts believe America Movil offered to buy the rest of KPN to squeeze more money from Slim's great rival in Latin America, Spanish company Telefonica, which is seeking to acquire KPN's German unit, E-Plus.
If so, the move paid off: earlier this week, Telefonica raised its offer by 6 percent to 8.55 billion euros, and it won America Movil's support for the deal.
The E-Plus sale will provide cash that will improve KPN's balance sheet, and although it leaves the company without direct exposure to Europe's biggest mobile market, it makes America Movil's 2.40 euro a share offer less attractive, analysts said.
In a research note written before the KPN foundation's announcement, analysts at Sanford Bernstein said: "We think that KPN could be worth as much as 3 euros per share."
Raising the bid would be out of character for billionaire Slim, who has accumulated a business empire stretching from retail and financial services to infrastructure and oil and gas drilling companies by snapping up undervalued firms.
Shares of Slim's company ended down 0.16 percent at 12.81 pesos in trading in Mexico on Thursday. KPN's shares closed down 0.65 percent before the foundation's announcement.
"The fear now will be that Slim will now try to exit - any sign that he will throw in the towel and sell down his stake will hang over the KPN shares," said a person familiar with the telecoms sector, speaking on condition of anonymity.
To do that now would come at a hefty price for Slim, who is still a good way from breaking even on his KPN investment.
On average, Slim's telecoms giant paid about 3.24 euros a share for its Dutch stake, including stock bought as part of a rights issue by KPN earlier this year.
($1 = 0.7562 euros)
(Reporting by Sara Webb, additional reporting by Robert-Jan Bartunek in Brussels, Leila Abboud in Paris, Elinor Comlay and Tomas Sarmiento in Mexico City; Editing by Tom Pfeiffer, Steve Orlofsky and Carol Bishopric)
By Sara Webb and Elinor Comlay
