Peter Erskine, the chief executive of the mobile phone operator mmO2, last night refused to rule out the possibility that the Dutch telecoms company KPN might return with a better offer for the business, while hinting that it might turn predator itself.
Speaking towards the end of a day in which his group's share price leapt nearly 17 per cent in the first day's trading since it admitted having a takeover approach, Mr Erskine said he thought it was "very unlikely" that KPN would launch a hostile bid for mmO2. But he would not rule out another friendly approach from the Dutch company.
He also stressed that mmO2 now had the credibility it lacked two years ago to mount its own corporate activity and left open the prospect of the company instigating its own approach for KPN. "You can't rule it out, but it's not on the agenda at the moment," he said from the sidelines of the 3GSM mobile phone conference in Cannes.
KPN confirmed yesterday it had made a proposal to mmO2 and said it still believed "the logic for a combination between the companies remains intact" even though the talks had ended. Ad Scheepbouwer, KPN's chief executive, also quashed speculation that the company might make a hostile offer for the UK business and hinted that there were also other targets on the company's radar screen.
Nevertheless, shares in mmO2 jumped 15.25p, to close at 107p making it the biggest riser in the FTSE 100 index last night as investors thought it possible that KPN could return with another offer, while suggesting that another predator might also swoop.
Even Mr Scheepbouwer admitted, during a financial results meeting with analysts, that his company's rebuffed proposal had put mmO2 "in play".
KPN's takeover proposal said to have valued mmO2 at about 110p a share emerged late on Friday night after the stock market had closed. An offer at current share price levels, were it to materialise, would make at least £1.5m for Mr Erskine, who has a raft of options and shares in the business.
Ever since mmO2 was demerged from BT, it has been plagued by takeover speculation, with suggestions it would make suitable prey for a number of telecoms companies. KPN has long been linked to the company, although its interest was said to have initially been in mmO2's German operation before it looked at an offer for the whole group. A deal there would have boosted KPN's mobile phone operation E-Plus in Germany, a market dominated by Deutsche Telekom and Vodafone.
Mr Erskine said mmO2 had rejected the overtures from KPN on the basis of shareholder value. "We had a full board meeting on Friday. We rejected the offer and ... it is business as usual," he said. "People like to say the situation is similar to the AT&T Wireless situation in the US but we are not overtly trying to sell the company. I do not accept we are in play. That would involve us rushing around trying to sell ourselves. I do not rule out someone else coming back for us but as of Friday night we rejected the KPN offer."
Other names linked to mmO2 have included Telefonica, Hutchison Whampoa and NTT DoCoMo while there has also been talk that BT might want to reclaim the business. Given that background, City analysts were unsurprised by recent developments. Analysts at Bear Stearns billed mmO2 as "a natural candidate" for a deal given its "insufficient scale" in Germany.
Separately, KPN yesterday announced a return to profit in 2003 with a profit before exceptional items of ¤655m compared with a loss of ¤163m in 2002. Stripping out exceptional items, including a ¤1.08bn tax windfall, net profits totalled ¤2.73bn.