Telekom Austria sidestepped suggestions yesterday that major shareholder Carlos Slim might try to take the company over after the Mexican tycoon bid for the rest of its Dutch peer KPN.

Unveiling results showing competition remained cutthroat, chief executive Hannes Ametsreiter (right) declined to comment on bid speculation that pushed Telekom Austria's share price sharply higher on Friday. Slim's America Movil, which bought large stakes in KPN and Telekom Austria a year ago in its first foray into Europe, offered €7.2 billion on Friday for the 70 per cent of KPN it does not already own.

Shares in Telekom Austria, in which America Movil owns almost 24 per cent, fell 2.2 per cent to €5.60 by mid-morning yesterday, following the rise of almost 9 per cent on Friday on the KPN bid news.

Slim bought into the two European telecoms operators at prices that appeared cheap as both battled fierce competition in their home markets that they could only partially offset by operations abroad.

KPN’s shares are now trading at less than a third of what Slim paid, and Telekom Austria stock has also tumbled from the €9.50 per share he paid.

If Slim were to bid for more Telekom Austria stock, he would be obliged under Austrian law to offer the same €9.50 to remaining shareholders, but that obligation expires on September 25th.

Slim's bid for KPN is a major blow to arch-rival Telefonica, which made an $11 billion offer last month for KPN's crown jewel, Germany's E-Plus. The two rivals control about 60 per cent of Latin America's mobile markets. Telekom Austria, by contrast, does not compete with Telefonica in any of its markets: Austria, Bulgaria, Croatia, Belarus, Serbia, Slovenia, Macedonia and Liechtenstein.

The former state monopoly is still 28 per cent owned by the government, and 53 per cent of its staff are civil servants who are nearly impossible to dismiss.– (Reuters)