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Telefonica sweetner puts E-Plus bid back on track

Telefonica sweetner puts E-Plus bid back on track
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Telefonica has sweetened its bid for E-Plus, the German business of Dutch phone company KPN.

It seems to be enough to satisfy Mexican billionaire Carlos Slim, who is the part owner of KPN and a rival to Telefonica in other markets.

KPN said Slim’s America Movil had given an “irrevocable commitment” to vote for the sale.

The new terms include KPN getting a bigger stake in the German company than originally agreed, in essence upping the price leading to fears it is overpaying.

Javier Mielgo, an analyst at Mirabaud Finanzas in Madrid said: “Telefonica has finally ceded. It is a way to secure the deal by putting about 500 million euros on the table. Telefonica isn’t overpaying too much as it has in past acquisitions such as Vivo in Brazil, but the new terms are not as attractive for Telefonica shareholders anymore.”

KPN will get 20.5 percent in the entity combined from its E-Plus unit and Telefonica Deutschland, up from 17.6 percent initially agreed.

The move could also help Slim in his attempts to buy the 70 percent of KPN that he does not already own with a 7.2 billion euro bid.

Analysts said it would address one of the concerns raised by KPN’s independent foundation, which has the power to block a takeover.