UPDATE 3-America Movil threatens to abandon KPN bid
* Says ready to cancel bid if foundation maintains stance
* Foundation said on Thursday it would move to block bid
* Foundation wants America Movil to make "fair bid"
* KPN shares drop more than 6 percent
BRUSSELS, Aug 30 (Reuters) - America Movil threatened to abandon its 7.2 billion euro ($9.5 billion) bid for Dutch telecoms group KPN, after a company foundation told the Mexican telecoms firm to make a higher offer or it would veto the bid.
The foundation, an independent group of former executives from Dutch companies, tasked with protecting the interests of KPN stakeholders, bought almost 50 percent of KPN's voting stock late on Thursday, blocking the deal.
Set up when the former state monopoly was being privatised, the foundation said it was protecting the interests of shareholders, employees, customers, trade unions and "Dutch society more generally", which were at risk because America Movil had not consulted with KPN before making its offer.
"The soccer rules in Mexico and the Netherlands are the same but taking over a large company is not soccer. We may have different rules for this here than in Mexico" Jacques Schraven, an ex-president of Dutch Shell, who heads the foundation, said.
He told a news conference on Friday that the group wanted America Movil, owned by multibillionaire Carlos Slim, to make a fair bid for KPN and make binding arrangements with stakeholders such as employees before officially launching the bid.
America Movil denied its bid - at 2.40 euros a share - would put the company's interests at risk.
"We believe we can help make it into a better company, one that grows, creates jobs, is more competitive and ultimately is strong enough to remain a major player at home and abroad," America Movil said in a statement on Friday.
On Wednesday, America Movil met KPN's unions, saying they would keep the company's existing strategy.
The foundation said it had been in touch with America Movil this week and called for the company to open negotiations with KPN's board and the Dutch government.
"I think this is about a higher price and better conditions," a hedge fund investor in KPN said. "Maybe America Movil will raise its offer to 2.60, but if they withdraw the stock will trade between 2 and 2.10."
KPN shares fell nearly 6 percent to 2.155 euros by 1114 GMT.
America Movil already holds nearly 30 percent of KPN and offered to buy the rest earlier this month.
On average, Slim's telecoms giant paid about 3.24 euros a share for its Dutch stake, including stock bought as part of a rights issue by KPN earlier this year.
America Movil has said that its financing for the bid was in place and expected it to proceed in September.
Slim, who began 2013 as the world's richest man, could also try to fight the foundation's move in court.
"We wouldn't be surprised to see AMX go to (the European Union) to challenge the authority and legality of the foundation on the back of this move," Morningstar analyst Imari Love said.
"It's clear the foundation is trying to keep KPN Dutch-owned by using this poison pill, which, in effect, has the same impact of golden shares, which are illegal."
Jorge Negrete, head of telecoms think-tank Mediatelecom in Mexico City, said, "This isn't about business, this seems to me to be clearly about protecting the European market."
There was no immediate comment from the European Commission.
The foundation said that in theory it could block the bid for up to two years, but that Dutch law called for any such measure to be proportional with the threat.
Foundations such as KPN's have been used to try and gain an advantage in high-profile corporate battles, including luxury goods maker LVMH's failed hostile takeover of Gucci in 1999, and hedge funds' efforts to replace the board and break up chip equipment maker ASM International in 2008.
A number of analysts believe America Movil offered to buy the rest of KPN to squeeze more money from Slim's great rival in Latin America, Spanish company Telefonica, which wants to buy KPN's German unit, E-Plus.
If so, the move paid off; earlier this week, Telefonica raised its offer by 6 percent to 8.55 billion euros, and it won America Movil's support for the deal.
The E-Plus sale will provide cash that will improve KPN's balance sheet, and, though it leaves the company without direct exposure to Europe's biggest mobile market, it makes America Movil's 2.40 euro a share offer less attractive, analysts said.
In a research note written before the KPN foundation's announcement, analysts at Sanford Bernstein said, "We think that KPN could be worth as much as 3 euros per share."