Last checked at 
* KPN foundation abstains from vote
* America Movil votes in favour of sale, board members notpresent
* No update on negotiations with America Movil
By Robert-Jan Bartunek
THE HAGUE, Oct 2 (Reuters) - Shareholders in Dutch telecomsgroup KPN approved the sale of its German unit E-Plusto Spanish rival Telefonica for 8.55 billion euros($11.6 billion), paving the way for it to step up investment andresume dividend payments.
Shareholder approval had been widely expected because KPN'slargest shareholder America Movil, which is biddingfor the Dutch group, agreed to back the deal after Telefonicaraised its purchase price and gave KPN a larger stake in themerged entity of E-Plus and Telefonica Deutschland.
The combination of KPN's and Telefonica's German units willcreate Germany's largest mobile operator by customers, allowingTelefonica to see eye to eye with competitors Vodafone and T-Mobile.
A foundation tasked with protecting the interests of KPN'semployees, customers and shareholders - and which gained nearlyhalf of the voting rights in August to block temporarily AmericaMovil's bid - abstained from voting at Wednesday's extraordinarygeneral meeting.
America Movil, the Mexican group owned by billionaire CarlosSlim, owned about 30 percent of the Dutch company before thefoundation stepped in and has two representatives on KPN'sboard.
However, neither of America Movil's board members werepresent at the meeting on Wednesday because of a potentialconflict of interest, given that the two companies are still intalks about the Mexican group's bid for KPN, Jos Streppel,chairman of KPN's supervisory board, said.
"We are in talks with America Movil to get to a mergerprotocol and how that will end is unclear," Streppel toldshareholders, many of whom called on KPN to disclose moredetails about the state of the takeover talks.
"We have fiduciary duties towards our shareholders and otherstakeholders according to Dutch law and hope that we can find abalance to give a positive recommendation."
The foundation has previously said that, apart from makingsure that the new owners made clear arrangements with employees,America Movil should also make a fair offer for KPN.
Analysts have said that America Movil's offer of 2.40 eurosper share was not very generous, especially as KPN enjoyed a 925million euros tax break because of the sale which equates to0.22 euros per share.
Every 0.05 euro increase in the bid price would cost AmericaMovil about 150 million euros more.
KPN said it would use the proceeds of the sale of E-Plus toinvest in its network and resume paying a dividend in 2014 afterskipping shareholder remuneration in 2013.
KPN, which will hold a 20.5 percent stake in the combinationof E-Plus and Telefonica Deutschland, said it expectedregulators would clear the deal by mid 2014.
