America Movil is prepared to drop its takeover bid for KPN after the Dutch company’s foundation, which is charged with protecting stakeholders’ interests, effectively put a block on the deal.

The foundation said it had intervened to “safeguard the interests of KPN and its stakeholders, including shareholders, employees, customers, trade unions and Dutch society more generally”.

It accused America Movil of a “hostile” approach to its KPN bid, rather than trying to strike an initial agreement with the company.

However, in a statement America Movil rejected the claim and said if the foundation maintains its current position then the Mexican company is prepared to withdraw its takeover offer.

America Movil also said it did have initial contact with KPN management before making its offer, “contrary to what has been stated by the foundation”.  And after the offer had been made, the Mexican group said it sought out KPN’s management with the aim of establishing a new relationship agreement.

The foundation has exercised an option, which is written into the company’s statutes, that issues it with new preference shares equivalent to a stake of nearly 50 per cent in KPN, which effectively stops America Movil’s takeover.

The foundation initially expressed its concern two weeks ago.

America Movil’s management has been mounting a charm offensive with Dutch politicians and union leaders to convince them of the merits of its bid. And earlier this week it issued a statement designed to reassure KPN stakeholders. It mentioned that KPN’s headquarters will stay in The Hague and its brand will remain untouched.

However, the moves were not sufficient for the foundation, which is unhappy about the manner of America Movil’s approach. Specifically, it is unhappy that the Mexican group did not first try to reach a merger protocol with KPN.

Instead,  America Movil drafted an offer document that was submitted to the Netherlands Authority for the Financial Markets. There was no consultation with the Dutch group, says the foundation.

But the foundation does leave the Mexican group with a glimmer of hope. It will hold the Class B preference shares “only temporarily”. And will consider “from time to time” when the shares should be redeemed.

It also added that it supports the sale of KPN’s E-Plus operation in Germany to Telefonica. America Movil succeeded in extracting improved terms from Telefonica.