Dutch telecoms carrier KPN has not ruled out a hostile bid for mobile phone group MmO2 after the latest round of takeover talks ended.

"All options are always open," a KPN spokesman said by telephone from Amsterdam. "We never exclude any options."

MmO2, the sixth-largest European mobile phone firm with assets in Britain, Germany and Ireland (where it owns the second mobile operator O2) is valued at around $15.2 billion (€12.1 billion) and is one of the hottest takeover targets in the industry, mainly because analysts consider it too small to survive alone.

KPN, at one time a strategic partner of Eircom, said last Friday it had approached MmO2 with a bid but that talks had ended. MmO2 confirmed it had received and considered a proposal and that discussions had ceased. An MmO2 spokesman said yesterday nothing had changed since.

News of the latest bid talks between MmO2 and KPN, which have had on-off merger talks for years, came hot on the heels of Tuesday's $41 billion cash takeover of US mobile group AT&T Wireless by larger rival Cingular.

KPN has been interested in particular in MmO2's German business O2 Germany, which would boost its own German unit E-Plus and create a stronger third-ranked rival to market leaders Deutsche Telekom and Vodafone in Europe's largest telecoms market.

MmO2 is ranked fourth in Germany and Britain in terms of customer numbers.

KPN, facing stalling domestic fixed-line telecoms growth, is under pressure to beef up a loss-making German subsidiary that could provide the key to future growth.

The firm reports annual results today. - (Reuters)