By Leila Abboud and Gilbert Kreijger
PARIS/AMSTERDAM (Reuters) - Mexican tycoon Carlos Slim launched his offer to buy up to 27.7 percent of Dutch telecoms group KPN on Wednesday, giving KPN just four weeks to come up with a plan to convince shareholders to reject an offer it believes is too low.
KPN said it would publish a response shortly to the partial tender offer from Slim's America Movil, which was announced on May 7 and is worth about $3.25 billion or 8 euros per share, and that it was continuing to work on its options.
KPN's management has hired Goldman Sachs and JP Morgan to advise it on its alternatives, which analysts and bankers say mainly consist of selling off assets including its Belgium and German units to generate a higher return for shareholders.
Since Slim's tender offer is direct to shareholders, many of whom have watched in dismay as KPN's shares slid 35 percent in the past year, KPN's management and board cannot just refuse it or hold out for a higher price.
KPN shareholders will have until June 27 when the tender offer closes to decide whether they believe America Movil's presence will create value in the long term or if the Mexican group will end up pursuing its own agenda to their detriment.
For its part, KPN is concerned that America Movil would have too much power over its strategy, especially a long-mooted sale of its German business worth 8-10 billion euros, without offering enough of a premium for the privilege, said a person close to the situation.
The person said the worry is that with a 27.7 percent stake America Movil and Slim would outweigh other minority investors many of whom don't turn out to vote in KPN's annual meetings.
Stan Pearson, head of European equities at Standard Life, a top 40 investor in KPN, told Reuters in early May when the offer was first announced that much would depend on how America Movil and Slim handled themselves.
"We're keeping an open mind, but whether this is ultimately a good thing depends on what he brings to KPN - whether he's a sleeping shareholder who allows the management to get on with what they need to do, or whether he wants more say in where KPN should be going and whether that coincides with what minority investors think," he said at that time.
"It will be interesting to see how many people choose to tender their stock."
America Movil Chief Financial Officer Carlos Garcia-Moreno said on a conference call on Tuesday that the company, which has long harbored ambitions to expand in Europe, wanted to create a "long-term partnership" with KPN.
He added there would be no increase to the tender offer and no bid for a majority stake.
"It's up to the shareholders of KPN," he said.
Investment bank Espirito Santo advised its clients on Wednesday to take the America Movil offer because the premium on offer was "decent" and KPN's defense options were limited since the logical bidder for its German business Telefonica was unlikely to be able to make a higher offer.
"Investors will obviously want to wait until the very end of the partial tender offer on June 27 before tendering," the analysts wrote. "Assuming that nothing has come from Telefonica or management's review of strategic options by then, we think it would be best to accept the offer."
KPN shares were up 0.8 percent at 7.648 euros at 6:10 a.m. EDT (1010 GMT).
(Reporting by Gilbert Kreijger, Leila Abboud, and Sinead Cruise; Editing by Dan Lalor and Mark Potter)