The Mexican telecoms giant America Movil upped the ante overnight in its unsolicited bid for shares in Dutch peer KPN, saying it had managed to raise its stake in KPN to 20.9 per cent.
Controlled by billionaire Carlos Slim, America Movil has now moved within seven per cent from its goal to own 27.7-per cent in the Hague-based KPN to give it a foothold in the European market.
"As a result of the transactions entered into today, both in and outside regular market trading," America Movil will hold more than 299 million shares in KPN "representing a capital interest of 20.92 per cent," a statement said.
America Movil launched its bid on May 30 for just over a quarter of the Dutch group, offering eight euros ($US10.07) a share or 2.6 billion euros ($A3.26 billion) for the stake.
The Mexican telecoms operator held 4.8 per cent of the Dutch group prior to making the hostile bid.
KPN's board has urged shareholders to hold off on the unsolicited cash offer, saying that the deal substantially undervalued the Dutch operator.
Meanwhile KPN managers raced to find an alternative source of cash for shareholders through the sale of two subsidiaries, E-Plus and BASE.
The Dutch group said Thursday that it would launch the sale of its Belgian mobile unit BASE next month now that a strategic review of the deal had been finalised.
Although KPN did not say how much it wanted for BASE, local media reports in April, when KPN first said it was looking into a possible sale, quoted a figure of around 1.8 billion euros.
"The proceeds will be used to improve KPN's credit profile and financial flexibility," KPN said on Thursday, adding that BASE now accounted for about a fifth of the Belgian market.
Earlier this month the Dutch group said it would also look at "strategic options" for its German subsidiary E-Plus.
According to the Dow Jones Newswires, KPN has held talks with Spanish telecoms Telefonica. KPN in a statement said no agreement was reached because of "current adverse conditions in financial markets".
Market analyst Nico van Geest told AFP the end game was near on America Movil's bid.
"America Movil now only need a small part to succeed," he said, adding "I think KPN's management is being abandoned a bit," as the Mexican group's stake jumped from 8.7 per cent to 20.9 per cent.
"I think the market is saying 'eight euros a share is a nice offer'. It will take a long time for KPN management to exceed in a price above eight euros," added Van Geest, head of research at investment management company Keijser Capital.
But he believed America Movil -- in the short term at least -- would not increase their stake beyond their target as companies who go above 30 per cent then has to make an offer on the remaining shares, according to Dutch law.
"I think that's it for now," said Van Geest but he added: "KPN is trapped by the deal with America Movil".
"They can't do anything else, they've lost, that's for sure."
America Movil controls the mobile telephone market in Latin America with some 225 million clients in 18 countries at the end of 2010. In 2011, it posted the equivalent of 39 billion euros ($A48.93 billion) in revenues.The Dutch group employs 31,000 people and recorded sales of 13.16 billion euros ($A16.51 billion) last year.