KPN owns now some 21% of Telefonica Deutchland , gets 5 billion Eur. in cash from the Germans and Spain and still ends up with 17.6 % of Telekom Deutschland! No wonder that Slim approved the deal, although Telefonica Spain is his main competitor in South America.
With the tough situation at European telecoms this is really a wonderful deal for KPN. Thumbs up for their savvy negotiators!
Their balance sheet will be greatly improved, they still own part of E-Plus and they are thinking now of reinstating the dividends in 2014, one year sooner than they previously announced!!
In the future the 17.6 % of Telefonica Deutschland they now value at 3.5 billion Euros could probably sold for much more, strenghtening heir balance sheet and increasing the value of their stock.
KPN seems to have turned the corner with this deal and warrants to be bought again.
Some more info:
The German subsidiary of the Spanish firm Telefonica will buy KPN's mobile phone unit in Germany for appr 4.5 billion Euros( $6 billion) to form a new company which will have 38 % of the German market, the nr.2 will be Deutsche Telkom with 32.8 % and Vodafone with 22.8 % These are just rumors of the negotations; Carlos Slim has already given his approval of the deal, financial papers in Holland say. KPN may retain a small %.
To-morrow (Tuesday( KPN will release the 2nd quarter financial results. Hope they will be O.K.