The fifth largest mobile network provider in the world, Telefonica, has raised its offer to buy Germany’s E-Plus from its Dutch owner, KPN,(the largest shareholder in E-Plus)who are supporting the sale.
Apart from receiving the EUR5 billion in cash, KPN will also keep an increased stake of 20.5 percent in the merged O2/E-Plus network. The company had been due to be left with 17.6 percent of the merged network.
In addition, KPN provides a call option to Telefónica to attain that higher 2.9 percent stake in Telefónica Deutschland from KPN which is only doable one year after the transaction if complete. This is according to the new terms of the deal.
On the basis of these improved terms the total implied transaction valuation for E-Plus is now EUR 8.55 billion, as compared to EUR8.1 billion under the previous terms.
KPN said that it will use the majority of the EUR 5 billion cash proceeds to increase its financial flexibility and support the execution of its strategy in The Netherlands and Belgium. KPN also intends to recommence dividend payment to shareholders for 2014.
América Móvil, as main shareholder of KPN with a stake of 29.77 percent, has agreed to vote in favour of the new offer. América Móvil is still carrying out its own separate offer to buy KPN.
Shareholders are due to vote on the deal on the 2nd October.