* Many Dutch companies use foundations that can block takeovers
* KPN most recent example using foundation to stop unwelcome bid
* KPN suitor America Moviles now discussing price
By Philip Blenkinsop
BRUSSELS, Sept 29 (Reuters) - Dutch preference shares, once a device to share the benefits of a family business, have become an unbreachable barrier to hostile takeovers in the Netherlands, most recently forcing Mexico's America Movil to the negotiating table.
America Movil, Latin America's biggest telecoms group, quickly learned that it could not simply muscle in on its target, Dutch peer KPN, after a foundation charged with protecting the group exercised a call option on preference shares that gave it half the company's voting rights.
Such a "poison pill" takeover defence, long accepted by Dutch courts, is not just effective but also remarkably cheap, costing just 25 percent of the shares' nominal value.
KPN's protective foundation was able to obtain its half stake in a company worth a total 10 billion euros ($13.5 billion) for just 255 million euros.
America Movil, whose billionaire owner Carlos Slim wants to extend his empire to Europe, is now talking to the company. It said on Friday it might yet make a formal offer in October, a month later than it had planned.
Many Dutch companies are protected by similar foundations - including Ahold, ASML, DSM, ING , Philips and TNT Express.
"They have the potential to make life hard and to derail a transaction," said Nomura analyst Frederic Boulan.
"Such Dutch foundations have been used in the past to deter hostile takeovers. Their angle is to safeguard the company and its stakeholders, but also national interest."
The structure started out in the 1920s as a way of passing down a family business, for example giving control to one child and the right to a dividend to another. When expanded to include companies in general in the 1970s, Dutch industry was quick to see the benefits.
The Dutch government has said it plans to create a foundation to protect ABN AMRO, the lender it nationalised in 2008 and could return to the stock market in 2015.
While common in the United States, largely in the form of share issues to all existing shareholders, poison pill constructions are rare in Europe.
Some states such as France or Italy have typically intervened to prevent what they consider strategically important industries falling into foreign hands.
The Dutch pride themselves on the open nature of their economy, but broadly back the system of protective foundations as a safeguard.
And while the European Union has challenged states seeking to influence private businesses, for example through a golden share that carries special rights, as has been used in Britain, Germany and Spain, private owners or shareholders may decide what they deem useful for a company, subject to national laws.